Frequently asked questions
Regular money is fungible. This means that a Rs 10 note can be replaced by another Rs 10 note without any loss of value. The same applies to one bitcoin. However, NFTs are digital assets such as artwork, songs or collectables. They are unique and cannot be replaced by other NFTs. This makes them non-fungible. Hence, the name NFT (non-fungible token).
The metaverse refers to a virtual space where users can interact with other users in a computer-generated environment. These interactions are facilitated through the use of Virtual Reality, Augmented Reality, and other related technology. A user can strap on a VR device, enter the metaverse and go shopping for virtual clothes (which can be NFTs) or meet friends for a cup of virtual coffee, right from the comfort of their home.
While both the concepts have only just risen to popularity, they both have been around for a while now.The first NFT – Quantum - was minted in May 2014. Created by artist Kevin McCoy, it is a pixelated octagon in a hypnotic cycle of changing colours and patterns. Quantum was sold in Nov 2021 for $1.4 million.
To mint and sell NFTs, the first thing you need is a crypto wallet to facilitate the asset exchange. It’s best to look for a wallet that works on Ethereum as this blockchain powers most of the NFT marketplaces.
NFT marketplaces are blockchain-based platforms that allow creators and designers to showcase their works of art. Enthusiasts can bid on these NFTs in a time frame specified by the seller, with the artwork going to the highest bidder.
There is no set way to determine the exact value of an NFT. Usually, the last bidder’s offered value indicates how it is perceived. Nonetheless, there are some factors that should be considered when trying to determine the value of an NFT.