What the Hell is an NFT?
NFTs are taking the world by storm. And now, they are into the mainstream with celebrities and other established brands using them. For instance, Adidas did launch a collaborative NFT with Prada, and now companies like Coca-Cola and McDonald’s are in the mix. But, although NFTs are popular, many people don’t understand what they are and how they are changing the game. If you are one of these people, you have come to the right place. We will help answer some questions about NFT, including NFT floor price, NFT staking, etc. Let’s get started and answer the question what the hell is an NFT?
What Does NFT Stand for?
An NFT stands for a non-fungible token. It is a digital token representing a real-world object. Here, investors use a digital lender and a nascent technology to own a token. Therefore, this means that individuals can wrap an object in a digital package and authenticate it with a digital signature to make it authentic and rare.
It thus allows them to certify an object or a piece of art as authentic. NFTs offer uncountable applications. Many people are adopting it as it’s a unique way to determine and prove the ownership of an asset.
NFTs have been around since 2014 as part of the Ethereum blockchain. Ethereum is a cryptocurrency on blockchain that supports NFTs and stores information, helping them function differently from the ETH coin and others. However, we should mention that other blockchains can also implement their NFTs versions.
What Makes a Good NFT?
We will always have different opinions and preferences about art and aesthetics. According to some people, a good NFT depends on the content. However, others focus more on the stories behind them. But, one of the most crucial elements of an NFT is its technological strength. Some NFTs are decentralized, while others can be easily damaged and manipulated.
Imagine you have two paintings, and you cannot change their location. One is in a library with excellent security, and the other is in a building that could collapse at any point. Which of these two paintings would make a significant investment to you?
Most collectors spend large amounts of money on NFTs without taking the time to understand the location of the digital artworks’ assets. But, it’s essential to determine the location of the NFT before acquiring it. Doing that helps you know the visibility of the piece of art and whether it will hold value in the future.
Remember that technical issues can affect NFTs, making them lose their value even if they’re from a great artistic viewpoint. Therefore, an essential quality of a good NFT is its technology.
NFTs and Blockchain
Some NFTs stored in blockchain. But others use off-chain storage that involves a centralized provider like Google cloud. This provider stores some of the NFT’s assets, mainly the media and metadata, on a centralized server. However, the future of such an NFT is uncertain.
Note that the organization running the server can go bankrupt. Also, the project may do a “rug pull.” In that case, the digital asset will vanish, and you’ll end up with a ‘page not found’ notification when trying to access it.
If NFTs on a centralized provider you can modify it easily, affecting their authenticity. However, a centralized provider is suitable for NFTs with rich metadata and media that can’t be stored on the blockchain.
Another consideration of what makes a good NFT is the communities surrounding it. A project with a strong community is the best since the holders will likely not sell their NFTs unless at an excellent price. It’s just like brand loyalty.
What is NFT Staking?
NFT staking is where collectors lock NFT tokens on a platform or protocol and get staking rewards along with other benefits. By doing that, holders can earn a decent income from their tokens without losing ownership.
Staking means that the collector locks the token in a digital wallet to ensure that the blockchain network operates smoothly and securely. Then, in exchange for this, the collector gets some rewards. Stalking typically uses a proof of stake (PoS) mechanism for this process.
So how does staking work? The blockchain platform or protocol locks the tokens in a staking pool and chooses validators randomly. These are supposed to mine or confirm the transaction blocks. Participants with many pledges have a higher chance of being selected.
Anytime there is a new block on the chain, it mints and distributes new tokens to validators as rewards for stalking. Validators receive bonuses depending on the coins they’re stalking, the time they’ve been stalking, and the token’s inflation rate.
What is the Most Expensive NFT Ever Sold?
The Merge is the most expensive NFT ever sold at USD 91.8 million. This artwork is unique as it can be classified as fragmented art. Sold it between 2 and 4 December at the Nifty Gateway NFT market.
The Merge isn’t a single project. Instead, it combined more than 28000 collectors and was sold in mass units. These collectors had bought $266,445 masses when the sale ended on 4 December. In the beginning, each assembly sold at USD 575. After that, however, the price increased by USD 25 after every six hours.
Following The Merge are:
- Everyday- The First 5000 Days- USD 69.3 million
- Human One- USD 28. 9 million
- Cryptopunk #5822- USD 23.7 million
- CryptoPunk #7523-USD 11.75 million
- CryptoPunk #3100- USD 7.58 million
What is NFT Floor Price?
Floor price means the lowest amount you can spend to become an NFT project member or own an NFT. The NFT owner of that specific project determines the floor price and lists the sale price at a cheaper amount than other sellers in the project.
For instance, Bored Ape Yacht Club, a competitive NFT project, has a floor price of 39.99 Ethereum. So, those who want to purchase it can do so for that amount, which is the lowest you need to become a member of this project.
However, this doesn’t mean that you purchase the cheapest options for the project. The best thing is to buy the category of your interest. But, purchasing the floor is usually the best option for beginners as it lets them join a project.
We hope we have helped you answer what the hell is an NFT. Then, you can buy the floor and start collecting NFTs now that you have a better understanding of these tokens. The best thing about NFT tokens is that they are hard to duplicate, steal or inflate. Thus, developers can manage their project supplies effectively without breaking government regulations.