NFT’s Explained Non Fungible Tokens

March 16, 2022
Income Tax
Reading Time: 3 minutes

Introduction

This Presentation will cover

  1. What are NFT’s?
  2. Unique Features of NFT’s
  3. Which work could be created as NFT?
  4. Some Incredible NFT sales in recent times
  5. Benefits of NFT’s
  6. A brief walkthrough to an NFT Marketplace

What are Non Fungible Tokens?

What are NFT’s, Crypto Art?

Non Fungible Tokens commonly called as NFT have got much attention and hype in current times.

The most easy to understand definition of NFT is – NFT’s are virtual art, masterpieces whose creation and ownership is authenticated or imprinted on Blockchain Technology.
The word art is very vast and could include digital copies of paintings- hand or virtual, videos, audio recordings, photographs, images and much more

We need to understand the word Fungible too .

Fungible means something which is interchangeable like a USD 100 note. It is Fungible. NFT’s are Non Fungible , that means they are not interchangeable , they are unique and one of kind with no replicas or duplicates

What are the Unique Features of an NFT?

  1. They are non interchangeable. Every NFT has a unique identity and is one of kind
  2. Each NFT has a unique value which the creator/seller expects to receive for it.
  3. NFT acts as a proof of ownership of original work

Art Creator famously known as Beeple sold NFT for $ 69 Million – Everydays 5000 – at Christies

Chris Torres $ 590,000 – Nyan Cat

Twitter Founder Jack Dorsey $ 2.5 Million – Sold his First Tweet

Benefits of NFT- For Creators/Sellers and Buyers

  1. Sellers gets a platform through blockchain technology to establish the
    Proof of authenticity/originality of it’s work.
  2. Sellers gets access to customers at global level through NFT’s marketplaces like Opensea , Rarible etc
  3. Sellers are assured of instant payout on sale of NFT.
  4. Sellers can built in Smart Contracts wherein they can charge Royalty in the form of percentage of each subsequent sale of it’s NFT Creation
  1. 1. Buyers of NFT are assured of original work as each NFT is registered on Blockchain with a unique code so the risk of buying a false/replica/duplicate artwork is eliminated.
  2. The Crypto Art can’t be stealed as the buyer’s transaction is recorded on Blockchain.
  3. The buyer has access to whole range of unique, modern Crypto Art from across the world.
  4. Buyer can make capital gains by rising value of it’s NFT

A Brief on How NFT’s can be Created, Bought or Sold?

  1. Create an image/digital art in jpg, jpeg or MP3 video or audio
  2.  Create a Digital Wallet and add some Ether – Crypto Asset to it
  3. Create your account on Market Place like Opensea or Rarible etc
  4.  Link your Digital Wallet and Marketplace account
  5. By following the easy and guided steps upload the image/digital art and sign it. In this process fees is charged by the Marketplace/ Blockchain servers-called Gas fee.
  6.  The Digital Wallet gets debited by Gas Fee and NFT is created with unique code which reflects ownership rights gets created.

For Selling NFT , you have to list them for sale which mentions the sale price and terms of Smart Contract- Defining the period for which is available for sale, Royalty terms etc. Buying gas fee will be applicable.

For Buying NFT too , you have to follow a similar process of creating a digital wallet, creating account on Marketplace and then buying the NFT you desire. Selling gas fee will be applicable.

NFT Marketplace- rarible.com

NFT’s are a new concept and is on very initial stages. The NFT market is not regulated and there is a huge scope in it’s advancement as a separate industry in WB3.