Hi Everyone,
Here I am going to talk about all of the basics about NFTs & their buying guide. Primarily NFT stands for Non Fungible Token . Something that is "fungible" can be exchanged with an equivalent item -- for example, a $5 bill with another $5 bill. ... NFTs are digital items that can be bought and sold using this blockchain technology. But they are not fungible, making them a different type of asset.
Now let’s deep dive into its buying process:
There are two cryptocurrencies that are supported by NFTs. They are Ethereum(ETH) and Solana(SOL). Here we are going to watch out for this website: coinmarketcap.com extensively for all of our cryptocurrencies value and their chart details and a lot of many things related to cryptos. Also for India, we can refer to Coinswitch Kuber or CoinDCX.
One thing to clear first regarding the relationship between NFT and Cryptocurrencies. Whenever Crypto price goes up NFT goes down and vice versa. That does mean
💡 Price of Cryptocurrencies ∝ 1 / Price of NFTs
Why? For example, you bought one NFT(XYZ) for let’s say 1 ETH and at that time 1 ETH was for $3000 USD. Now if in case ETH price goes up the same “XYZ” NFT is valued at 0.8 ETH let’s say, but in terms of value, both of these are the same.
NFT needs to be always unique. Like for example if there is a video of Kohinoor diamond then that is a totally unique entity digitally, in the universe so that one can hold it as an NFT if that is offered on the NFT platform. Now the value of ART is up to the beholder. This means the value of Kohinoor diamond’s video maybe 100 ETH for you but for someone else it may be for 200 ETH. It’s all up to the beholder. That person may have some interest in it or have some kind of emotional connection. So purposefully that is holding different values to different persons.
Now coming to the NFT communities. You may know about Gary Vee, who also released an NFT Project named as VeeFriends. The point is it may not always be about the artwork only. Sometimes it may be for being in the community like VeeFriends. We can check most of the NFTs on the platform named Opensea. If you will check the top-listed NFTs here in terms of the exchanged value you can see some crazy numbers, depending upon the time you are reading this blog. Like as of my current time, PhantaBear is listed on top in terms of volumes which are valued at around 19.8K ETH which is mindboggling. Another popular one at this time is Bored Ape Yacht Club which also holds some crazy numbers. The same goes for CryptoPunks.
Let’s try to understand the numbers listed here. If you will go to NFT Bored Bunny you can check that there are four primary nos you need to go through.
Items: The no of items are listed on this NFT Project which is approximately 5.0 K
Owners: The total no of owners are holding all of those items which are 3.5 K(at least one NFT obviously some of them are holding more than one)
Floor Price: One important aspect that needs to check always is floor price which stands for the minimum price anyone has listed these NFTs to sell. Like for Bored Bunny, it is around 1.15 ETH or 2,25,655.16 INR or 3,049.12 USD.
You may think who is that crazy to buy such nonsense arts. But if you go to the activity tab standing beside the Items tab on opensea platform for Bored Ape Yacht Club NFT you can check the recent activities. Like as of my time you can the below image:
Now obviously you can buy whatever price you want above the floor price for that NFT.
Similarly, if you go into details you can details about each NFT like the image given below:
Volume Traded: Total amount traded for the NFT Project. Like for Women and Weapons, it is 2.5K ETH.
Summary: Basics of NFTs and the platforms like CoinMarketCap, Opensea, and the primary terms.
Coming Up Next: In-depth details about the properties, why, and how people buy these NFTs.
Stay tuned. To be continued.....
Awesome 👍