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In the ever-evolving digital frontier, the artist’s canvas has seen a revolutionary shift from tangible mediums to the limitless world of pixels and codes. The burgeoning market of Non-Fungible Tokens (NFTs) has paved the road for creators to monetize their digital artifacts in a blockchain-secured environment, nurturing originality and forging unbreakable bonds between creators and collectors. As aficionados of the modern digital renaissance, we understand that navigating the NFT landscape may initially appear daunting, yet the process of creating and selling an NFT token is far less complex than it seems. Stay tuned with us as we guide you step by step, demystifying the process and empowering you to take the digital art world by storm.
What Is an NFT Token In Simple Words
NFT tokens are now a not so new phenomenon for a wide audience, on which high hopes are placed in various sectors of the economy. In a conversation with Izvestia, the founder of the DBX digital ecosystem, Igor Zakharov, noted that interest in this technology is now being shown in the real estate market. Thanks to some features, in the near future they can be used for almost instantaneous transfer of rights to property, bypassing the usual “paper” procedures. “NFT-ization” will most likely affect the area of intellectual property protection, where it will become one of the main tools. Already now, such tokens are used in online games and virtual worlds, when protecting domains, identifying and certifying digital objects.
It’s all about the uniqueness and irreplaceability of NFT tokens. Although they are built on blockchain technology, like cryptocurrencies, it is these two qualities that fundamentally distinguish NFTs from “crypto.”
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“Non-Fungible” Is the Keyword
Fungibility is the ability of an asset to be interchangeable with assets of the same type. For example, one Bitcoin is equal and can be exchanged for another Bitcoin.
Technically speaking, issuing your own NFT token is not difficult. In general, says Igor Zakharov, you need to make a file, select a platform for “minting coins” and connect your e-wallet to it. Then you should upload the file to the platform, set the transaction characteristics and create a description of the digital asset. After this, the owner can start “minting”, for which he will have to spend a certain amount of digital currency.
Technically, when implemented on the Ethereum network, this is a smart contract that complies with the ERC721 standard. The difference is in the name – non fungible token -. In the case of a regular token or cryptocurrency, each unit is equivalent to any other. Each NFT token is unique and, according to the terms of the smart contract, it cannot simply be replaced with another.
Some crypto exchanges also have their own solutions. Thus, the Binance NFT marketplace supports most graphic and audio formats: JPG, PNG, GIF, PDF, MP4, MP3, MPEG, AVI, WAV and SVG. Once the user uploads information, the marketplace team approves the content (usually within 4-8 hours), after which it can be auctioned or sold at a fixed price.
It is important for creators to remember that an NFT cannot be altered or corrected once created; in order to create a corrected/new NFT, it will be necessary to start the process over again.
What’s the Origin?
There is no consensus in the expert community about who and when issued the first NFT token in history. However, it is safe to mention several historically important points for the asset.
Experiments on creating NFTs began back in 2013, but for a long time remained a “toy” for developers. The first more or less massive project arose in 2017 – it was Crypto Punks, released by the American studio Larva Labs.
They were simply unique images of cartoon characters that could be bought, sold, transferred. Also in 2017, the full-fledged blockchain game Crypto Kitties was released, which attracted the greatest attention in this area. There, it was possible to raise kittens using NFT tokens, breed them, or sell them. The project attracted a lot of money and became a noticeable step towards the further popularization of NFTs. This project was created on the Etherium network, for which NFT animals were purchased using its internal currency.
Some are calling Etheria the first full-fledged NFT project in history, and it was even shown live at DEVCON, the first Ethereum developer conference in London. And someone says that CryptoPunks and CryptoKitties were the first.
Also Read: What Is a Crypto Launchpad?
How NFT Art Is Sold?
Million-dollar price tags in real currency for NFT tokens appear due to the fact that, as with any collectible item, the price is determined by the market and the number of people willing to buy it.
Here, tokens are no different from paintings. The rights are highly dependent on the terms of the token issue. So far, no legal framework has been designed to allow clear rights to be claimed based on ownership of such tokens.
Crypto art is like any other form of art. It is essential to know who created the NFT, what is the worth of the piece of art and how much it can be claimed by other collectors.
If an NFT is part of a limited edition or series, then some numbers often have more value than others. For example, the number 1 is the most popular. The numbers 13 or 7 are also often coveted items in collections. Value and rarity depend on a combination of several factors.
However, there aren’t currently norms that would define the legal status of such tokens and the scope of rights that are transferred with it to the buyer.
After selling a digital painting, in theory, the author can be required to delete the image file. But you need to remember that digital art objects are very easily changed, and the same painting can, for example, be cropped. Technically, it will become a different image – yes, a derivative, but not the one that was originally “hardwired” into the token.
If this was not initially intended as a tokenization of real works of art, then the rights are quite vague – there is no generally accepted process in this area. But, for sure, they will appear soon and, most likely, are already being worked on.
Plus, uncertain legal status is a temporary phenomenon, since the technology itself is at the very beginning of its development and application in various fields. And this issue will be clearly resolved in the legal field, especially when the use of NFTs becomes widespread in transactions related to the financial sector.