what is it, which ones are more expensive, how to create and how much are they worth

In the last few years, you’ve probably heard at least one of these three terms: NFT, bitcoin, and the metaverse. What do they have in common? They represent part of the universe of cryptoassets, which have moved the internet and digital negotiations.

Although they are not as popular terms, as is the case with the Stock Exchange, we are talking about a lot of money: in 2021 alone, the negotiations of non-fungible tokens, the so-called NTFs, moved around US$ 24.9 billion, of according to DappRadar.

Is this investment worth it? Is it for everyone? How to create my own NTF? O UOL Economy listed the main doubts on the subject.

NFT: what it is, how it works and more

What is NFT?

NFT is the abbreviation of “Non-Fungible token“, which in Portuguese means “token Non-Fungible“. A token is an electronic symbol that represents a good. It has unique characteristics and cannot be replaced by anything else.

Almost anything can be an NFT: artwork, music, real estate, collectibles, Olympic medals, seats at an event, memes, or even a social media post.

One example is the first tweet in history, made by the co-founder and ex-CEO Twitter handle Jack Dorsey on March 21, 2006. About 15 years later, the NFT was auctioned for $2.9 million. The amount was converted to bitcoin and donated to an institution Social.

How did the NFT come about?

You NFTs emerged in 2014, when American artist Kevin McCoy sold a work called Quantum with an encrypted code of authenticity embedded through technology blockchain -which is a way of tracking certain operations performed over the internet, such as a “log book”.

But it was only in 2017 that the expression NFT emerged and was popularized, referring to unique digital goods that are issued by blockchain. The big boom happened in 2019 and in the last year it has become a trend in the world of digital assets.

How and where to buy an NFT?

You NFTs can be purchased on trading platforms, whether they are linked to a exchange or independent -who are dedicated to one or a few projects. In this case, just create an account on the chosen platform or access an existing one, connect the digital wallet, check the balance and buy the NFT.

Operations can be made with physical currencies, such as the euro, dollar and real, or digital currencies, such as ether, AXS, among others. Most of the trading takes place on the platform OpenSeaconsidered the largest in the world in sector.

In what contexts is an NFT used?

NFT can be used in as many different contexts as possible. As it can be anything from products or even experiences, NFT is extremely flexible. This allows many functionalities and applications: membership in an exclusive club, property registration, artwork, show and much more.

An example is the Bored On foot yacht club (Bayc). By name, you may not know the work – but you have probably come across the images of a “bored monkey”, which even became Neymar’s profile picture on his social networks and was also acquired by Justin Bieber.

More than a fun image, it demonstrates status. The player, for example, invested the equivalent of R$ 790 thousand in the work and can have access to exclusive events promoted by Yuga labs, a company that created the images of monkeys. A kind of VIP club.

What are the different types of NFT?

Almost any type of digital production can be recorded through tokens non-fungible. It can be a song, movie, video, social media post, gifsmemes etc.

In the market Bitcoinwhich is the biggest exchange of Latin America, have already been negotiated NFTs digital collectibles of vintage cars, commemorative of the SBT channel and also of the band maneva.

During the NFT.Riothe first international event dedicated exclusively to NFTswere presented the tokens of impact. These are the names of products that represent a new form of connection between artists, social projects and the public.

Some examples are the Hungry NFTs, with the objective of fighting hunger in Brazil; of metaverse Chapadão, aimed at the education of vulnerable children; and also the keeperswhich aim to help in the regeneration of biodiversity swamp.

What are the most expensive NFTs ever sold in the world?

The most expensive NFT title in history is by The Mergecreated by Park, a digital artist who has an anonymous identity. It belongs to around 30,000 collectors, who bought its more than 312,000 shares – in total, it is worth US$ 91.8 million, equivalent to BRL 475 million.

In the list of the most expensive NFTs, they are still, in order:

  • 2 – The work “everydays“, sold in March 2021 at an auction by Christie’srepresents a collage of 5,000 photographs taken by beeple daily from May 1, 2007 to January 7, 2021. Value: US$69.3 million.
  • 3rd – Another work of beeple, human One was sold in November last year and represents a digital sculpture of a walking astronaut, displayed in a metal and glass box nearly two meters high. Value: $30 millions.
  • 4th – The number #5822 of the CryptoPunks It ranks 4th on this list. It belongs to a collection of 10,000 drawings by 24×24 pixels in style appearance 8-bit, which is among the best known and most valuable in the world today. Value: US$ 23.7 million.
  • 5th – In addition to a photo and a sculpture, beeple is also on the list of NFTs best sellers with a short, approximately 10 second video created for the 2020 US election. If then-President Donald Trump were elected, the video would show the Republican triumphant, which it did not. The NFT sold for $6.6 million shows Trump on the ground, his body full of curses.

Why are NFTs so expensive?

You NFTs are expensive precisely because they represent tokens exclusive and original, in addition to having been created by renowned artists in the digital environment, such as beeple and mad dog Jones – which considerably increases the value of the product, albeit virtual.

With the boom of the metaverse and the universe cryptoIn general, interest in NFTs also grew, which causes an effect of the already known law of supply and demand: the greater the demand, the greater the prices.

How to create an NFT?

The entire path is quite technical and each network has its particularities. NFT is created by a process called minting (to mintfrom English, which means to coin).

In this operation, a metafile or metadata is stored and a smart contract is made so that it can be read and viewed. This file can be an image, sound, video or a combination of them.

Once created, the sales process is like any other crypto assetin marketplaces that enable transactions.

Who can have an NFT?

Anyone can have an NFT as long as they have Login on a marketplace that offers the transactions and buys the token. Or receive as a gift through a wallet crypto.

What is the meaning behind the NFT?

The NFT is a crypto asset that represents an artist, a brand, an experience, among other options. Depending on what is offered, it can mean connecting an idea or project with its audience.

A person who is a fan of a certain designerfor example, can feel closer to his references by having a digital, exclusive and irreplaceable work created by him, even if the product exists only in the metaverse and is not palpable.

the same happens with NFTs collectibles and acquired by personalities, such as the token bought by Neymar. And also with the so-called “impact”, which represent a social cause.

Is NFT a good investment?

Just like any investment, it takes study, caution and analysis. because it is about crypto assetscare must be redoubled – they are still recent when compared to conventional products, such as currencies and fixed-income securities.

Like other products, they are subject to valuations and devaluations, influenced by internal and external reasons – and not as well known, as is the case with the traditional market.

Therefore, be aware of the total amount of money you are willing to use and the risks that the operation offers so you don’t get ripped off.

How to make money with NFT?

There are two ways to make money with NFT: creating tokens or reselling them. If you are an artist, you can create digital works, turn them into NFTs and make this operation an income. You can start creating these arts from scratch by following tutorials on the internet.

If you are not part of the creative team, and prefer to stay in the operations world, you can purchase tokens and resell them when there is appreciation. In this case, the sale price must be higher than the purchase price, considering possible fees, for the operation to be worthwhile.

Like any other product in your portfolio, this investment will not always generate profits right away. It is necessary to observe the movements of the market, in addition to knowing how to analyze them, so as not to be at a loss.

Source: Bruno Milanello, New Business Executive of the Bitcoin World; Binance; and DappRadar.

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