In the cryptoverse, a non-fungible token (NFT) refers to a unique and non-transferable unit of data stored on blockchains, or digital ledgers. With an NFT, a public certificate of authenticity or proof of ownership is provided through a digital ledger.
Additionally, NFT's can be related to reproducible digital files such as audio, videos, photographs and more (a growing list, actually). However, these underlying digital files does not come with any restrictions when shared or copied. Unlike blockchain cryptocurrencies such as Bitcoin, NFTs are not interchangeable (fungible) — thus being called "non-fungible".
If you're interested about NFTs and would like to know how to buy them then you can get started via eToro. Keep on reading for more information.
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History of NFTs
NFTs have been around before Ethereum, despite the belief of most people who associate it with the Ethereum blockchain that it is an ETH-related technology.
The idea for NFTs originated from the "Colored Coins" first issued on the Bitcoin blockchain sometime between 2012 and 2013. Colored Coins are tokens used to represent real-world assets. It was used to prove ownership of various assets, such as real estate, automobiles, and even stock and bonds. In a paper titled "Overview of Colored Coins", Meni Rosenfeld first introduced the concept of colored coins as an asset. Though it wasn't quite as innovative as what we know NFTs has become today, the idea brought by the Colored Coins laid the groundwork for the future of non-fungible tokens.
In 2014, Counterparty was founded. In addition to being an open-source internet protocol built on the Bitcoin blockchain, Counterparty is a peer-to-peer financial platform. With the Counterparty exchange and asset creation, users were able to create tradable currencies.
Also, in 2014, Kevin McCoy (credited by many as the man who first created an NFT) minted an NFT called "Quantum". Remember, this was during a time when crypto ar market is still not popular.
The image of Quantum is a pixelated representation of an octagon filled with circles, arcs, and other shapes that share a common center, with larger shapes surrounding smaller ones and hypnotically pulsing in fluorescent hues. A one-of-a-kind artwork, it is now being sold for seven million dollars in the NFT marketplace.
When Ethereum debuted on the blockchain in 2015, the market for NFTs continued to grow wider and wider.
Uses of NFTs
Right now, NFTs are most commonly used in art and collectibles. However, experts see future additional uses that can go mainstream in the future. Future uses of NFTs include:
- DeFi NFTs
- Community platforms
- Events and Ticketing
- Metaverse and virtual lands
- Social media influence
- Digital identity
- Fantasy sports
As per the most recent sales volume, the most popular NFTs are:
- Axie Infinity
- The Sandbox
- Bored Ape Yacht Club
- Wolf Game
- Mutant Ape Yacht Club
- Ape Kids Club
- Art Blocks
- Desperate ApeWives
All-time popular NFTs include Decentreland, Theta, Chiliz, Enjin Coin, FLOW, WAX, and DigiByte.
Who Can Create an NFT?
NFTs can be created by almost anyone. Digital artists, photographers, graphic designers, musicians, entrepreneus, art students, cinematographers, social media content creators to the average John and Mary. An NFT can be minted by anyone as long as they can prove they created or legally own the content.
Where to Buy NFTs?
Here are some of the most popular NFT Marketplaces in the crypto world today:
- Axie Infinity
- GROW HOUSE
- NBA Top Shot
- Nifty Gateway
- The Sandbox
Buying NFTs with eToro
First time buyers of NFTs would prefer a simpler process since it can be quite complex doing it.
To help you buy NFTs on eToro, here are the simple steps:
- First Step: Buy Ethereum (ETH)
Ethereum can be used to buy many NFTs, and you can purchase this easily on eToro. After buying Ethereum from the trading platform, transfer it to your digital wallet — in this case, you can use your eToro Wallet. To do this, go to "Portfolio" on your eToro dashboard, select "Ethereum", then click "Transfer to Wallet".
Remember: You need to allot extra Ethereum to cover for the network fees.
- Second Step: Download and Use MetaMask
A type of crypto wallet, MetaMask serves as a channel to the Ethereum-based decentralized finance of the DeFi and the world of NFTs. MetaMask can be accessed on a browser as an addition to Google Chrome and other browsers, or from a mobile app of both Android and iOS systems by simply downloading the MetaMask app from MetaMask.io.
Using it is simple. Just create a digital wallet, secure it with a password and set secret recovery phrase.
Take note: Your "Secret Recovery Phrase" is important to remember and not lose it since this is used to restore access to your MetaMask once you forgot your password.
- Third Step: Send Ethereum to MetaMask
By having bought your first Ethereum and downloaded the MetaMask and created a wallet, you're all set to proceed with sending your Ethereum to your MetaMask wallet.
To do this, open your eToro Wallet and click the "Send" button found under Ethereum.
Open MetaMask and copy the address of your wallet and paste it on the address field found on your eToro app. To complete the process, just set the amount of Ethereum you want to send and click "Send".
The transaction time depends on the speed of the Ethereum network as sometimes it can get really busy. This shall not take longer from several minutes to an hour.
- Fourth Step: Linking to an NFT Marketplace
Now that your MetaMask Wallet stores Ethereum already, you can now link to an NFT platform.
Many investors prefer this platform called OpenSea, which is said to be the biggest NFT platform today.
On the OpenSea main page, find the "Wallet" icon and select "MetaMask". You will be then connected to your wallet.
Tada, you're now linked to a wide range of NFTs. Explore the OpenSea website and check out the seemingly endless collections of digital items from artwork, avatars, the first tweet and even viral memes that costs from a couple of tens of dollars to hundreds of thousands of dollars.
There are also other NFT platforms that are popular among buyers of NFTs. A few of those are SuperRare, Rarible, Foundation, Nifty Gateway, Larva Labs and even an NBA Top Shot Marketplace.
- Last Step: Buy Your First NFT
After you found an NFT you fancy buying, you can either buy it right away or make a bid.
If you click the "Buy Now" button, you will be asked to check the NFT before proceeding to the "Checkout" to study the gas fees. You then became a new owner of an NFT after you click "Confirm".
If you click the "Make Offer" button, you will be then prompted to enter a bid. To make a bid, you need to convert your Ethereum to WETH (Wrapped ETH) before you can proceed with the bidding transaction.
A "Gas Fee" is a fee charged to all users before they can perform any transaction in the Ethereum blockchain.
Ready to buy your first NFT? Sign-up now.
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