7 Things You Must Know About NFTs

NFTs are tokenized collectibles that possess intrinsic value due to their uniqueness and scarcity, and are widely popular on blockchain platforms like (BSC) and Ethereum. The value of NFTs stems from authenticity and rarity. Therefore, exploring token details through blockchain explorers may be helpful.

NFT use cases are not limited to digital art and collectibles; the Binance Smart Chain (BSC) has now launched an innovative ecosystem of non-fungible tokens. Considering the recent media buzz and high prices of NFTs, it’s easy to see similarities with the 2017 ICO boom. However, these two are fundamentally different.

To deepen understanding, we will introduce the basics of NFTs based on common misconceptions and frequently asked questions.

Introduction

When it comes to non-fungible tokens (NFT), art and collectibles are usually mentioned. Graphic designers and visual artists benefit from these unique tokens, which have sparked a huge sales frenzy for their works. Beeple is a well-known example.

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NFTs are indeed hot, but the topic’s depth goes far beyond the headlines. To truly delve into this field, it’s essential to understand and explore the world of NFTs. Their footprints are widespread, with numerous use cases, and many misconceptions need clarification.

What is a non-fungible token (NFT)?

NFT is a digital asset using blockchain technology that demonstrates uniqueness and collectible value. Its popularity is partly because NFTs are created by renowned artists or world-class musicians. Such tokens are also useful in gaming or collecting.

You may have heard of “NBA Top Shots,” a digital collectible themed around basketball trading cards. These cards function like physical trading cards, but blockchain technology effectively guarantees their authenticity. Some cards are very scarce, and each card’s value varies.

In short, non-fungible tokens cannot be forged or duplicated. Understanding the definition of interchangeability helps us grasp the uniqueness of NFTs:

Interchangeability is the ability to swap assets of the same type.

For example, two bitcoins of equal value can be exchanged. Conversely, this #1/99 Keldon Johnson Holo Icon Top Shot card is one of a kind and non-interchangeable.

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What can NFTs do? Can they be traded?

NFTs come in various shapes and sizes, with many different use cases emerging. If it’s a pure digital art collectible NFT, its practicality is quite limited. Of course, you can trade them, but a photo NFT has little practical difference from a regular printed item.

However, some NFTs have real utility in gaming, such as the famous Ethereum-based game (CryptoKitties). In this game, collectible cats can pass on their traits through breeding to offspring.

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NFTs are also widely used in financial platforms. PancakeSwap’s NFTs are highly artistic and can be exchanged for digital currency, with a large market. Through this unique combination, users can speculate on the price trends of redeemable amounts.

These NFTs share the ability to be traded for other digital assets. That is, NFTs can be bought and sold using Ethereum, tokens from the crypto world, or other digital currencies. However, each NFT’s value is unique (i.e., non-interchangeable).

How to determine the scarcity and value of NFTs?

NFT value depends on what the token represents. If it’s digital art, valuation is similar to other art forms. Factors include the creator, artistic quality, and demand among collectors.

If an NFT is limited edition or part of a series, those with specific serial numbers are usually more collectible. #1通常最受热捧，而#13 or #7, for example, are highly sought after. Value and scarcity are influenced by various factors, including those mentioned above. Top Shot NFTs demonstrate how serial numbers impact prices.

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For game-themed NFTs, specific projects or creatures can generate economic returns. If they provide an additional staking reward of $100, then, regardless of artistic value, their worth at least reaches $100.

PancakeSwap’s NFTs are slightly different. Some tokens can be converted into CAKE—the platform’s cryptocurrency. For example, if a cute bunny NFT rewards you with 10 CAKE, and CAKE’s price is $20, then its value is at least $200.

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Where can you get NFTs?

To explore available NFTs in the market, there are several options. NFT marketplaces sell numerous non-fungible tokens, created by both famous artists and amateurs. The largest platforms include Ethereum-based OpenSea and Binance Smart Chain’s Treasureland or BakerySwap.

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New marketplace platforms are constantly launching, with some standing out from fierce competition. If you’re interested in buying works by renowned artists, be sure to verify the authenticity of the marketplace. You can also find NFTs by playing blockchain games or participating in decentralized finance (DeFi) projects.

What are the main NFT projects on the Binance Smart Chain?

The Binance Smart Chain benefits from a healthy NFT community, with activities extending beyond art and general markets. NFT games and collectibles with staking rewards or economic benefits are highlights of the Binance Smart Chain.

As mentioned earlier, BakerySwap and Treasureland are two of the largest NFT trading platforms. The former also allows users to create NFTs quickly and at reasonable prices. Both platforms are excellent avenues to showcase NFT art and creativity.

Blockchain games like (Battle Pets) and DeFi protocols experimenting with NFTs through more financial mechanisms are gradually entering our view. PancakeSwap’s NFT trading volume ranks first on Treasureland, making it a high-usage NFT project. Click this link to learn more about these NFT projects.

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Are NFTs the new ICOs?

In short, no. Although NFTs and ICOs both raise funds and have recently been hyped, their similarities end there. An Initial Coin Offering $NFP ICO is a method of raising funds by selling project tokens. This activity surged around 2017 but was marred by scams, many projects ending prematurely, and gaining a notorious reputation.

It’s understandable why some see NFTs as similar to ICOs. Recently, these digital collectibles have sold for millions of dollars. They frequently appear in media reports and are seen as easy ways to make money with digital currencies. These are the main similarities to ICOs. However, to avoid illegal projects, thorough research before risky investments is crucial.

How to verify the authenticity of NFTs?

Proving the legitimacy of an NFT can be challenging and depends on the specific verification process. Unscrupulous individuals may upload others’ artwork and pretend to be the owner. In such cases, you must verify with the artist to confirm they are selling their own NFT.

NFT creators should also provide some form of identification to facilitate verification. Most verification involves checking the NFT via blockchain explorers like BscScan. When dealing with blockchain assets, adopt the approach of “distrust, verify yourself.”

Useful information includes the minting date and the wallet address that minted the NFT. You can also check whether the NFT matches transaction history IDs. This method is more reliable than simply examining photos or files related to the collectible. For example, recent sales data of artist Beeple shows that Christie’s auction house lists token IDs, contract addresses, and wallet addresses for verification and inquiry.

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Sometimes, links to files or IPFS links are provided for basic content verification. However, counterfeiters can also fake these. In most cases, it’s recommended to contact the creator first.

Summary

Today, the NFT space continues to see new use cases and development projects. Remember, this new technology only emerged in 2017 and is still in its early stages. Before investing in these tokens, you must have a clear and accurate understanding of this emerging field and how the tokens are used. Our impression of NFTs may still be rooted in art, but they are widely applied in many projects in different ways.