NFT is the abbreviation for “non-fungible token” and are digital collectables that are paid for with cryptocurrencies. On platforms, you can find animated cats, pixelated punks, and pictures of the artist Beeple or the famous art forger Beltracchi.
Hence, the first NFTs were offered on the internet in 2017. Today, the trade in tokens is booming. The auction house Christie’s sold a digital image of the artist Beeple for US$ 69 million in 2021.
What makes NFTs special is that they are unique and counterfeit-proof. NFTs cannot be multiplied or destroyed. The objects are based on blockchain technology.
Moreover, even if an NFT belongs to someone, it remains available on the internet – and you can view it. But only one person can own it.
Why invest in NFT
You may wonder why anyone would invest in something that someone can easily duplicate on a mobile phone or laptop. Much like business people wear expensive Rolex watches, expensive NFTs are used as profile pictures on social media to show wealth.
However, many people buy into the world of NFTs to be part of an online community. Hence, by owning certain NFTs, people can gain access to exclusive content and live events.
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Purchase a Nft
NFTs can be bought from online marketplaces. As with almost every application in the blockchain world, you will need a wallet to buy an NFT. To purchase an NFT, we recommend the MetaMask wallet.
If you don’t have a MetaMask account, install this app or browser extension first. If you already have, e.g. ETH somewhere else in a wallet, transfer some of it to this newly created MetaMask account.
Now visit OpenSea in your web browser by entering https://opensea.io/ in your browser’s address bar. On OpenSea, click on the wallet icon in the top right corner of the web page. OpenSea allows you to link different wallets. To do this, you need to click on the respective icon. Since we have already introduced MetaMask, we will continue the linking with MetaMask.
Yeah, you have done it! By linking your MetaMask wallet, a user account has automatically been created at OpenSea. Besides, the assets of your wallet that OpenSea supports are automatically displayed.
Hence, now you can search for the NFTs that match your wish. Make sure that the corresponding cryptocurrency is available when searching.
Also, please read our article on Upland.
I’m really intrigued by NFTs and the potential they have to revolutionize the art world. It’s amazing to think that artists can now sell their digital creations for huge amounts of money, something that was virtually impossible just a few years ago. However, I do worry about the environmental impact of NFTs, especially with the recent reports of how much energy is required to create and trade them. I hope that the industry can find a way to make NFTs more sustainable, perhaps through the use of renewable energy sources.
A decision favouring NFTs is, therefore, perhaps also a vote in favour of the current developments towards the metaverse.
Of course, the NFT hype could develop into a bubble that bursts with a loud bang. But a simple correction is more likely. So the dangers are limited as long as you follow the rules for all speculative asset classes: Only invest capital you are prepared to lose.