Understanding an NFT marketplace
The world of Non-Fungible Tokens (NFTs) exploded and leapt from niche market to growing its awareness across mainstream society.
NFTs, though, are still not fully understood by many people, despite their rapid growth. They are a cryptographic asset that is created with blockchain technology. They are unique and coded to confirm authenticity and ownership.
We are moving from the difficulties of providing authentication on physical collectors’ items, to being able to confirm and ownership rights of digital files.
They can be anything digital, and it is digital art which has taken the biggest upswing in demand and value.
The demand is what sets the price as well. Like a physical trading card with demand a rarity its value can go up and down.
Demand began to grow in the artworld and no one more so than Mike Winkelmann has benefitted more. Better known in the NFT world as Beeple, Winklemann saw the increased talk online of NFTs back in 2017 and put out his first items of artwork for sale a NFTs for $1. In 2021 those same NFTs are being sold on marketplaces for as much as six hundred thousand dollars.
Winkelmann has since gone on to sell his mosaic piece “Everydays: The First 5000 Days” at auction in Christies as an NFT form more than sixty-nine million dollars.
NFTs can be purchased on an NFT marketplace, with a range of different types available online. These marketplaces are platforms which allow artists and owners to sell their assets.
NFT Marketplaces have been set up in order for artists to be able to sell their work directly to a collector. There is no need for the dependence on an auction house and the commission which comes with selling their art through them.
As an NFT is sold on in a marketplace, NFTs also involve the possibility that the artist can receive a percentage of future sales of their work.
In order to be able to buy and sell on an NFT marketplace, a crypto wallet is mandatory, and all transactions will go through this. You can set your wallet up and fund it through a credit card, purchasing different types of cryptocurrencies.
It is important to understand the different types of cryptocurrencies, as well as which are accepted at different NFT marketplaces to ensure you are buying the correct one to use to buy the NFT you desire.
Behind the scenes, the marketplace creates an online contract for every NFT that is listed using blockchain technology to make it unique and distinct.
Then, a Smart Contract is used that regulates, monitors, and approves the transaction between the seller and the buyer. These contracts ensure that the owner remains the sole owner until they chose to sell.
Some NFT Market Place Features you should familiarize yourself with are:
Crypto Wallet – as mentioned before, this is a requirement for purchasing NFTs on the marketplaces. They will all require purchase through cryptocurrency and some of the most popular include Matamask, Coinbase and WallettConnect.
Registration – new users will need to register and integrate their crypto wallet into the platform they choose. Full details will be required in order to set up Smart Contracts with purchases.
Search – there is, in all good marketplaces, the options to narrow down and focus your NFT search to topics you are particularly interested in. You can search by price as well as browse particular styles of NFTs.
Alerts – set an alert to receive notifications on a range of desires, such as a new release from a particular artist.
Help – remember that those who run the marketplaces are there to assist you as well, as a buyer and as a seller. Live chats are there to make sure you fully understand the requirements of transactions which can differ from marketplace to marketplace.
There are a range of different marketplaces available, OpenSea being one of the biggest and most used. It is easy to navigate and covers a wide range of NFTs from Art, Music, Photography, Trending Pieces, Sports, and Virtual Worlds. It is a great place for those new to NFTs to visit first and get an understanding of what is available.
OpenSea, as well as many others, allows creators to mint their assets and develop their own ideas for NFTs to then sell through its marketplace using their own smart contracts.
There are many to visit, Nifty Gateway, KnownOrigin and Cargo, and all have taken a huge upturn in traffic with the massive increase in demand. Celebrity endorsement and the news of such huge values attached to work by Beeple, Pak and CryptoPunks.
Its appeal has exploded, and questions will keep going around as to what its ceiling can be. For those who have got in at the ground floor, the increase in demand has been incredibly profitable for many. Understanding the marketplace will give you access to an increasingly intriguing world.