Non-fungible tokens (NFTs) appear to be all the rage these days. From art and music to monkey art and tweets, these can be purchased digitally for millions of dollars.
However, are NFTs worth the money—or the hype? Some experts believe they are a bubble about to burst. Others feel that NFTs are here to stay and will forever revolutionize investment.
How are Kenyans fairing in the NFT world?
Before we can have a sense of what’s going on, are Kenyans even interested in NFTs?
Well, yes. Both artistes and investors are seemingly making an investement in NFTs.
According to the Knight Frank wealth report 2022, 6% of Kenya’s dollar millionaires own an NFT, while 13% have invested in a cryptocurrency.
A Nation.africa article on the NFTs craze also shows that artists are also making money from it. According to the article, 22-year-old Kenyan Emmanuel Ignatius sold an NFT for Sh700,000, making it his highest selling token.
In February this year, Henry Ohanga, also known as Octopizzo, earned more than $2,000 (Sh228,000) in the first 15 minutes of releasing NFTs of songs from his latest album Fuego in cooperation with HoneyCoin’s creator platform.
Kenyan creators also seem to have ganged up and held the first ever NFT Summit in Kenya on June 6.
What Is an NFT?
An NFT (Non-fungible token) is a digital asset that symbolizes physical stuff such as art, music, in-game items, and videos. They are purchased and traded online, frequently using cryptocurrency, and are typically encoded using the same underlying software as many cryptos.
Individual images—or perhaps the full collage of images—can be viewed online for free by anyone. So why are individuals prepared to spend millions of dollars on something that they can easily capture or download?
Well, because an NFT permits the buyer to retain ownership of the original item. Furthermore, it includes built-in authentication, which acts as proof of ownership. Collectors appreciate “digital bragging rights” nearly as much as the thing itself.
How is a non-fungible token created?
An artist, creator, or licensee creates a non-fungible token through a process known as minting. Minting is the process of signing a blockchain transaction outlining the basic token details, which is then broadcasted to the blockchain to trigger a smart contract function that produces the token and assigns it to its owner.
A non-fungible token is made up of a unique token identifier, or token ID, that is mapped to an owner identify and held within a smart contract. It is simple to verify ownership and reassign a token to a new owner when the owner of a specific token ID chooses to transfer it to another user.
How Does an NFT Work?
NFTs reside on a blockchain, which is a public distributed ledger that records transactions. You’ve probably heard of blockchain as the underlying process that allows cryptocurrencies to exist.
NFTs are commonly held on the Ethereum blockchain, though they can also be held on other blockchains.
NFTs are essentially digital versions of tangible collector’s artifacts. Instead of a physical oil painting to hang on the wall, the customer receives a digital file.
They will also have sole ownership rights. NFTs can only have one owner at a time, and using blockchain technology makes it simple to verify ownership and transfer tokens between owners. The creator can additionally store special information in the metadata of an NFT. Artists, for example, can sign their work by inserting their signature in the file.
What Are NFTs Used For?
Artists and content creators have a unique potential to monetise their work thanks to blockchain technology and NFTs. Artists, for example, no longer have to rely on galleries or auction houses to sell their work. Instead, the artist can sell it straight to the consumer as an NFT, allowing them to keep a larger portion of the revenues. Furthermore, artists can set up royalties so that they receive a share of sales anytime their work is sold to a new owner. This is an appealing feature because most artists do not receive future proceeds after their work is sold.
How to Buy NFTs
If you want to start your own NFT collection, you’ll need the following items:
To begin, you must obtain a digital wallet that allows you to store NFTs and cryptocurrencies. Depending on the currencies accepted by your NFT provider, you may need to purchase some cryptocurrency, such as Ether. You may now buy cryptocurrency with a credit card on platforms such as Coinbase, Kraken, eToro, and even PayPal and Robinhood. You will then be able to transfer it from the exchange to your preferred wallet.
Popular NFT Marketplaces
The following are the largest NFT marketplaces at the moment:
• OpenSea.io: This peer-to-peer platform describes itself as a seller of “rare digital artifacts and collectibles.” And get started, simply create an account to browse NFT collections. You can also sort by sales volume to find new artists.
• Rarible: Rarible, like OpenSea, is a democratic, open marketplace where artists and producers can issue and sell NFTs. Holders of RARI tokens issued on the platform can vote on features such as fees and community rules.
Should You Buy NFTs?
The ultimate result is that NFTs have advantages and disadvantages, but investing in any asset simply because it is tokenized is usually a bad idea. Whether an asset’s ownership is shown by a blockchain or not, the principles of investment remain the same. As an investor, your greatest move is to select high-quality assets that you want to hold and then do whatever it takes to get them.
NFTs are purchased by investors for a variety of reasons. Some people want to own the underlying asset, while others see value in the asset being tokenized as an NFT. Others may invest in NFTs to gain a better understanding of blockchain technology.
For example, in March 2021, crypto entrepreneur Sina Estavi made news when he spent $2.9 million for an NFT of Twitter CEO Jack Dorsey’s first post. However, his efforts to resell it have failed, with a top bid of only $6,800. Seemingly, the highest offer right now is at $30.
Overall, it seems the best way to do NFT is to be the creator.
