Crypto collectibles

03.11.2021 13 2576
Crypto collectibles

What is actually NFT?

Digital or Crypto Collectibles

NFT Ownership

NFT Collectibles and Collections

Creating NFTs

Frequently Asked Questions— FAQ

 

Ever heard of NFTs or some crypto collectibles? No doubt, each of us did; however, a little number of average people know what it all means. In the following article, you will find all the needed information on what are these new trends in the world of crypto and art. Even if you were never interested in contributing to the assets, your visit is not worthless because, in the modern world, everyone should be familiarized with digital art and ways of buying it. Since the NFT market develops rapidly, it is crucial to know how it works!

 

What is actually NFT?

Non-fungible tokens (NFTs) are representatives of particular real-world assets, physical or digital art collectibles, and many other objects that can be referred to as art. The main distinction of NFTs from other cryptocurrencies as Bitcoin is that the former are non-fungible, meaning it is impossible to exchange one token for another since they are of different value.

 

The thing that distinguishes NFT marketplaces from art markets is that the ownership of an art object is given not only by purchasing it but also by a special code stored in a blockchain. Thus, each NFT transaction becomes a unique performance with its identifying code.

 

These transactions are held by and stored in the Ethereum network. It brings the need to purchase NFTs with Ethers, digital tokens of the Ethereum blockchain.

 

1. Digital Assets

The first important thing to consider is to distinguish what digital assets are at all. So, the digital asset is everything that exists on the Internet or is stored as a digital piece of data and can be used in the future. It includes photos, videos, music, sounds, documents (in any format, including DOX, PDF, JPEG, and all others), design, and 3D files.

 

So, as follows, NFTs are made of these assets. It means that tokens include data from the digital space. From this point, we refer to digital or crypto-collectibles through the understanding that they are common digital assets.

 

2. Non-Fungible Tokens

Now let us familiarize you deeper with the non-fungibility features of NFTs. Consider an example of a cryptocurrency as Bitcoin (BTC). You can imagine dividing it into smaller pieces, exchanging one for another Bitcoin, and purchasing them for currencies from the physical world (e.g., dollars, euros).

 

The situation with NFTs is the opposite. NFTs represent crypto-collectibles, which means it is impossible to divide them, same as the impossibility to divide other collectibles from the real world without decreasing their value and initial form. You cannot also exchange one NFT for another since they represent art objects. Even if two collectibles have the same price in the crypto dimension, there is no way to make them equal in artistic value.

 

In this way, non-fungible tokens can participate in operations connected to real-world currencies exchange and transactions such as selling and buying art collectibles, but not making procedures of trading.

 

Digital or Crypto Collectibles

At this moment, we can dive into the universe of collectibles. Let us begin with the concept of collectibles from the physical art world.

 

Remember visiting galleries and museums? In the whole world, there are hundreds of thousands of art collections even settled for several centuries. People held various art objects as assets to create the collections of heirlooms transmitted throughout generations as their unique ownership. It helps the owners to possess a collection of art objects that can distinguish them from other wealthy owners and average people.

 

Therefore, each collectible has to be a unique asset, investment into the distinctive feature of the owner. From this point, art collectibles are always of limited number and edition and are sold at a special marketplace or by the exact artists, so there exists a clear possibility to prove the popularity and uniqueness of the artwork. 

 

1. Digital Collectibles

In the digital world, it is likely to create unique objects, too. However, it is hard to produce an exceptional object and even harder for this artwork to remain unique and not to be copied and transmitted several times throughout the Internet.

 

By that means, the digital art market is not secured, and the only ownership it provides is the artist's signature on the artwork. It is almost impossible to create a collection of digital art items without having other users collecting the same assets.

 

Nevertheless, the modern world suggests new ways of dealing with collectors' creativity.

 

2. Crypto Collectibles

With the appearance of cryptocurrencies, creating digital art was never the same. NFT became one of the ways that helped artists gain money from their originality and creativity by selling artworks. Bitcoin, Ether, and other tokens are the currencies not only of crypto investors but also of artists.

 

Now let us explain how it all works. In the case of creating digital art, posting it to the close artist-fan users' communities does not provide safety from copycats or resale. Digital items exist separately from their creators. However, modern blockchain technology gives the opportunity to make the art market fairer and safer for its suppliers and purchasers.

 

By exhibiting the crypto collectible on the NFT marketplace, the creator obtains the chance to make money on their product and be sure that it will remain only with its buyer (until the latter does not want to resell or share it publicly). Such a possibility is provided by the system of NFT transactions that secures the fact of purchase by storing it in the code. By that means, the art object has an official publicly available reference on its creator and buyer; that is why it cannot be copied or sold illegally.

 

It means that having a collection of digital artworks does not seem hopeless anymore. Whole NFT projects consisting of several pieces can be maintained by one and only one owner just because NFTs offer a new way of digital ownership.

 

NFT Ownership

Hopefully, now it is understandable why crypto tokens have given new opportunities to all the participants of the art market. When it comes to crypto-collectibles, we know that what we create, sell, or buy is taken into account by a digital ledger, which would not let someone else make use of the product.

 

It is also possible not only to secure the copyright but also to prove ownership. The one who purchases NFT has an infinite chance to verify their acquisition by showing the link created with the help of smart contracts. All this data is stored in the blockchain and is non-fungible. Thus, if you want to establish a collection, all the collectibles and links on their purchase transactions will be unique, and no one can infringe the priority to own the lot.

 

However, there is also a possibility to set fractional ownership. For instance, if you are a member of a company that aims to obtain an NFT collection, there is a possibility to divide the ownership among several members. The same can be made with real estate NFT projects if various contractors want to obtain an exact project.

 

Thus, digital or crypto-collectibles are exhibited on a special platform (marketplace), where each token is a unique artwork guarded by cryptography. Each NFT transaction is also a unique process held and encrypted as secured data in a blockchain. The proof of ownership is visible to everyone interested by simply seeing the link of the transaction.

 

Since non-fungible tokens are gaining popularity with each well-known purchase, millions of IT professionals try to establish safer systems that would not let hack the NFT transactions process. In the near future, the critics predict a rapid increase in the NFT market, while the artists create more and more unique and valuable collectibles worth buying.

 

Why Buy NFT?

Do you still have questions on why to collect NFTs at all? Well, there can be various purposes:

 

  • One of the most sincere and predictable is to support your respected artist. Some artists are just at the beginning of their path, so they need a supportive public. However, it is hard to become a noticeable person in such a competitive environment. So, any collector may start supporting the artworks they like by purchasing it, whereas the value of the item will increase by the fact of its acquisition. Furthermore, buying NFTs retain the artist with their copyright and intellectual property, while the artwork officially belongs to the purchaser, which is a significant feature in the digital world.
  • Another, though less sincere yet predictable in the art world, the purpose of acquiring non-fungible tokens is to acquire prestige in the art community. Again, each non-fungible token is a unique piece of art collected in a digital ledger. Its ownership is a valuable indicator for the members of the community. The same as with the physical world art collections, digital ones are possessed by wealthy people, although the artistic importance may differ from the real-world paintings or sculptures.
  • The more into-business purpose is to invest in cryptocurrencies. Digital assets are also valuable resources. Gaining more and more popularity in the asset world, NFT becomes a significant investment into your future budget. With an opportunity to resell it or with a predictable increase in its price, you can make your NFT collection a main source of wealth. With digital exhibitions, such a possibility becomes even more visible in the near future. NFTs are the same as bitcoin; while more people invest in it, its value grows.

 

Yet another approach

  • One more way to consider collecting NFTs is the opportunity to be the only holder of the rarest collectibles. An example to pay attention to is buying the rarest Pokemon cards that your real collection lacks. Or setting a collection of the NBA Top Shot videos. One of them starring LeBron James was bought for about 200,000 dollars! So, think of the collection of your dreams and try your best to find all the crypto-collectibles in the numerous auctions.
  • Thanks to fractional ownership, it is possible to divide ownership over collectibles among several people. After that, collected NFTs can be united together and shared as possessed by an established company. Moreover, it is also possible to produce NFTs on behalf of a company (as Dapper Labs do).

 

There can be multiple objectives for which it is worth gathering the NFT collectibles. Even though the objects are digital, they are still assets. It is more interesting than just trading on a Bitcoin marketplace, yet it is a good investment.

 

Non-fungible tokens are the value of the next generation, the part of the future world in which we can take part now.

 

How to Buy NFT?

Now, when you are finally ready to set an investment into your digital art collection, it is time to become acquainted with an appropriation process.

 

  • First of all, get into the world of digital wallets. Choose the more comfortable one for you and see whether there is any fee presented for the tokens transfer. It will be needed for the further steps.
  • Next, you will need to review the NFT marketplace to seek the platform where you like the collectibles and the pricing policy most. It is possible to trade on each, but some artists prefer using particular ones. Again, pay attention to whether there is a purchasing fee.
  • After finding all the needed platforms that can supply you with NFTs you would like to acquire, you will need to transfer money into cryptocurrency. Most often, NFTs offer Ether transactions, and however, if you have some assets in Bitcoin, you can transfer them into Ether too. Connect one of the chosen digital wallets to the platform.
  • Buy the preferred NFT!

 

The crucial step of any transaction is to check the trustworthiness of the digital asset you want to purchase. Although there are some stages for NFT suppliers on the market, scammers still exist even in the crypto field. Some people can fake whole collections, and some can replicate some other collectibles by parts. So, be sure your creator is verified by googling or asking them in person. Another case is the resale of the item.

 

Nevertheless, since it is easy to verify the ownership over an artwork thanks to the Ethereum blockchain, do not be mean to spend some time examining the trustworthiness of the seller, unless you want to participate in the auction!

 

Scarcity of the Collectibles

As was already mentioned above, digital art assets can be easily stolen and copied by the act of a couple of keyboard clicks. That is why digital collectibles are in excess and rarely have a meaningful value. It all leads to the problem of digital scarcity.

 

The pioneer of the field of digital scarcity is Bitcoin. It is explained by the fact that it was the first digital asset that could not be copied or transmitted to hundreds of thousands of Internet users.  Having the same properties as cryptocurrencies, non-fungible tokens are also scarce since there is a fixed amount of resources in the world for which these digital assets can be bought.

 

This new-made digital scarcity gives an opportunity to possess a unique crypto token. Again referring to the collectibles, remember that through many centuries having art assets collection was a prestigious and limited good. It is also possible to hand over the digital art collections from one generation to another, as each non-fungible token is an infinite piece of data, similar to other tokens. The only thing which can change its weight through time is the value of a crypto asset.

 

NFT Collectibles and Collections

Now, when you know almost everything, you may still have doubts about non-fungible tokens. Consider the following world-famous examples of crypto-collectibles transactions to see what are the pros, cons, and possible consequences of purchasing NFTs.

 

1. CryptoKitties and NFT gaming

One of the most popular and earliest events in the crypto world is the NFT gaming project called CryptoKitties. It aimed to supply the users with digital cats, each priced at 170,000 dollars. The popularity of the project led to the congestion of the blockchain.

 

Nevertheless, thanks to millions gained on digital cats sold, the users got into the crypto world. It all provided the users with loads of information about non-fungible tokens, and they could invest in other projects, whereas the creators got more interested in making new projects.

 

Dapper Labs—the creator and publisher of CryptoKitties—started collaborating with other artists, which let them unite and supply several NFT platforms. The new technology attracted many other participants from the gaming market. Ubisoft and NBA posted their NFT game pieces, too, exactly after such a successful experience of CryptoKitties.

 

2. The Most Successful Crypto-Collectible

Probably the most popular collection of NFTs that existed till now is the crypto tokens of CryptoPunk. Larva Labs created 10,000 pixel-arts sold for more than 200,000 dollars in general. The most expensive and one of the rarest—CryptoPunk #7523—was purchased for 11,8 million dollars.

 

These digital collectibles were set as a collection of avatars but soon became the most famous phenomenon among crypto investors.  There are still two most wanted CryptoPunks on the market, so even this record has a perspective to be broken!

 

3. The Priciest NFT

Despite the general sum of sold CryptoPunks, there is a single asset that is considered to be the most expensive non-fungible token yet traded on the digital platform. It is a digital piece from an artist called Beeple. The token represents a 5000-piece collection of his artworks settled since 2007. At the end of the auction, the price of the NFT was about 70 million dollars!

 

This artwork is considered to be a really famous and valuable token, so its owner is now also a highly popular investor. Moreover, he is also a famous NFT collector, which makes him a wealthy crypto investor. Now he is an owner of the historical record for the biggest investment into one NFT.

 

4. The Digital Kind of Real World

Other tokens noted in the NFT community are ones that represent real estate. There are even parts of digital lands sold on the market—yes, the same as in Sims! Investors purchase the land parts (as game pieces) and even real estate to show off their digital assets or take part in digital online events—yes, the same as in Fortnite!

 

Millions of dollars are invested into Decentraland, the digital world. The recent most expensive purchase was estimated at 900,000 dollars here. Does it mean that digital land is more valuable than the real one? Seems like it is going to happen soon. However, Buckingham Palace has a historical record for the real estate price that appears to be unreachable to any NFT ever—almost 3 billion dollars.

 

5. Other Non-Fungible Collections

The thing to consider for enthusiastic and gambling people in the digital items world is collecting trading cards. Important to note that a crypto card just replicates its real-world asset. Nevertheless, as tokens, these cards have the same properties. They can also be limited, rare, and even authenticated by real figures!

 

Some examples are Pokemon cards, NBA stars, or some gaming heroes. All in all, there are millions of trading cards existing in the crypto world waiting for their collectors!

 

It is also possible to set a collection of videos. As in the case with the already mentioned NBA Top Shot, it is useful to seek the rarest and most popular moments from your favorite TV series or music videos. Also, do not forget about the collections of photos presented on each platform. Both beginning photographers and professionals publish sets of their works as tokens, so you can always support them and take over a few valuable crypto-collectibles!

 

Unlike all previously mentioned types of NFTs, there exist collectibles transmitted to the digital world right from the real one. An example of such a phenomenon is the work 'No Internet', where the authors included music and sounds (terrifying enough, just letting you know) representing their conception of the world with no Internet. Another unnoticeable representative is a scent. Literally, a scent sold as NFT! Surely, it exists as the physical bottle, too.

 

However, to produce the corresponding NFT, the authors practiced a special method of estimating the molecular vibrations of an item and transmitted them into the digital asset. As the creators say, it provides the sense of the reality of an object!

 

Creating NFTs

Once interested in buying, anyone may also consider creating and selling NFTs. Since it is common not only to publish digital art assets (paintings, photos, music), many people produce NFTs in the form of documents, screenshots, or something even easier to create. Nonetheless, it is vital to know how to publish non-fungible tokens.

 

How to Sell NFTs?

For the artists, it may be hard to find their purchaser and the place to sell the artworks. However, with non-fungible tokens, it became a way easier deal!

 

Each platform for NFTs accepts publishing any pieces of art, whatever you consider it to be, including both digital and real-world assets made by all users, with no limitations.

 

  • So, to start with, you again need to create your digital wallet. You will need to obtain some Ethers to publish even one NFT. Specifically, the process of publishing non-fungible tokens is called minting. So, be ready to pay a platform to mint something! Remember that similar to Bitcoin, and Ethers also change in price, so try to seek a perfect moment to transfer your resources into cryptocurrency.
  • Next, choose a platform on which you want to publish non-fungible tokens.
  • After finishing all the registration stages, you are certainly ready to mint your assets! From this moment, you can choose various options for the post. For example, pick the kind of pricing—auction, fixed cost, or time auction; or whether you want the item to be one of a kind or if it can be sold several times (which is a significant feature for crypto-collectibles).
  • Finally, you will need to pay a fee for publishing the asset. Note that since the NFTs are filed on the Ethereum blockchain, it is essential to use Ethers while dealing with them.

 

As you can see, probably the only problem which can occur in the case of selling NFTs is the danger of paying more than gaining. Many token-publishing beginners failed to become popular, although they had paid the fee.

 

Why Sell NFTs?

The non-fungible token technology became a breakthrough in two areas at once—art and crypto. Thanks to the opportunity to mint whatever is considered to be digital assets, almost every person on the planet can generate tokens. It is one of the reasons to try yourself as the creator, especially if you are not deprived of luck.

 

Nevertheless, the NFT marketplace is a great platform for realizing one's artistic talents. The experience of previous years shows that the biggest popularity and prices are gained by the objects produced thanks to the creativity of the author. It is considered that publishing crypto-collectibles is the best way of acquiring authority in the community as it attracts investors. So, the same as with physical art, the authors have a big chance to find patrons and gain popularity.

 

Do not forget that a non-fungible token is a crypto token, which makes NFTs a significant part of the cryptocurrency turnover. Except for being an interesting thing to collect and invest in, it is also an asset that can bring significant income. Many gaming NFTs creators establish a pricing policy that returns a proxy every time the game is sold. It gives artists an opportunity to realize their works on the market. The most beneficial way of making money on NFTs is believed to be an auction.

 

Now we hope you are able to at least speak about NFTs, not to mention market participation! We wish you good luck getting acquainted with the non-fungible token technology and finding your most desirable tokens!

 

Frequently Asked Questions— FAQ

 

What are crypto-collectibles?

Crypto-collectible is a limited and non-fungible digital asset. It is unique and indivisible, which means it cannot be equally exchanged for other tokens. For example, Bitcoin is not a crypto collectible since there are many others equal to it Bitcoins. Most often, crypto-collectibles are presented as trading cards, such as the NBA Stars; rare videos, such as the NBA Top Shot series; or avatars, such as Fortnite ones.

 

What are digital collectibles?

The digital collectible is a unique piece of a set of digital assets. Crypto-collectibles are a subset of digital collectibles since the former ones can only be presented as the former ones. So, any digital asset or a piece of data representing some item from a bigger collection that has to be gathered can be called so. The problem is that, unlike a crypto token, a common digital collectible can be copied and shared throughout the Internet, which makes it not unique anymore.

 

How do I buy NFTs?

To buy NFT, you have to establish a digital wallet, transfer your resources into Ether, and register on a preferred NFT platform. We recommend also verifying the trustworthiness of the artwork before purchasing it. You can do it by the smart contracts system that also helps to prove ownership over a token. Since the data about the transaction is collected in a publicly available unique link, you can see whether somebody has already bought the item.

 

Where are digital collectibles stored?

After purchasing the NFT, you will be assigned a link that shows the fact of the transaction between you and the author. It also can contain the date and the signatures of the participants. Since these transactions are filed on the Ethereum blockchain, the NFT itself will also remain there. It means you can also find a way to see it through the same link. Another way to find your purchased NFT is through the individual server, but this option has to be discussed with the creator of the asset.

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