NFTs in the crypto world: Complete guide on investment and opportunities

What is an NFT in cryptocurrencies and how does it work?

NFTs ( non-fungible tokens ) operate on blockchain technology. Unlike cryptocurrencies such as Bitcoin which are fungible ( one Bitcoin can be exchanged for another identical ), NFTs are unique and not directly interchangeable with one another. Each NFT contains metadata that specifies its ownership and authenticity, stored on the blockchain. This technology ensures the security and authenticity of the NFT, providing a decentralized proof of ownership that is impossible to counterfeit.

History of NFTs and their technical functioning

NFTs first appeared in 2014 with the creation of "Quantum," designed by Kevin McKoy. However, they gained massive attention in 2017 with the launch of CryptoKitties, a blockchain-based game where users could buy, sell, and breed unique virtual cats. NFTs work through a minting process that creates a digital token on the blockchain that represents the asset. Ethereum is the most widely used blockchain for NFTs, with standards like ERC-721 and ERC-1155 that allow for the creation of unique tokens with specific and verifiable characteristics.

Strategies to Generate Income with NFTs

( There are multiple ways to gain profits in the NFT market:

• Buy and hold: Acquire NFTs with potential and wait for their value to increase over time, similar to a long-term investment in traditional assets.

• Create and sell: Develop your own NFT )digital art, music, or collectibles### and market it in specialized marketplaces.

• Set royalties: As a creator, you can set royalties for secondary sales of your NFT, earning a percentage each time it changes hands in the market.

• NFT Trading: Similar to cryptocurrency trading, buying NFTs at a low price and selling them when their market value increases.

• Yield Farming with NFTs: Lending your NFTs to earn rewards in tokens, taking advantage of market liquidity.

• NFT Staking: Lock your NFT assets to generate interest and rewards on specialized platforms.

Investment and trading in the NFT market

Investing in NFTs can be approached in two main ways: direct acquisition of NFTs or trading of assets linked to NFTs. Direct investment involves buying and holding the asset with the expectation that its value will increase. Trading related assets, such as CFDs, allows speculation on price movements without actually owning the asset. It is essential to understand that NFTs are highly speculative and present considerable risks, such as high market volatility and liquidity issues that can hinder quick sales at favorable prices.

Advantages and disadvantages of NFTs

( Advantages:

• Property Security: Blockchain technology ensures secure and transparent ownership that is immutable and verifiable.

• Democratization: Anyone can create, buy, and sell NFTs globally, providing greater opportunities to artists and independent creators.

• Liquidity: NFTs can be traded instantly on different markets, allowing for quick monetization when there is demand.

) Disadvantages:

• High transaction fees: Gas fees on Ethereum can be expensive, especially during periods of network congestion.

• Volatility: The value of NFTs can fluctuate dramatically, making them a high-risk investment with potential significant losses.

• Lack of regulation: The NFT space remains largely unregulated, which can lead to potential scams or frauds affecting investors.

Telegram NFT: New actors in the ecosystem

The activity of NFTs on Telegram has experienced exponential growth recently. According to Helika's report on games on Telegram for the third quarter of 2024, the platform recorded a 400% increase in NFT transactions during that period. The number of active wallets involved in daily NFT trading on the platform grew from less than 200,000 in July to over 1 million in September. This development highlights the growing importance of Telegram in the NFT gaming and Web3 sectors, becoming a significant competitor in the market.

Highlighted examples of NFT collections

• CryptoKitties: One of the first successful NFT projects, allowing users to breed and trade unique digital cats, laying the foundation for the market.

• Bored Ape Yacht Club ###BAYC###: A collection of 10,000 unique cartoon monkeys, some sold for millions of dollars, which also grants access to an exclusive community.

• X Empire NFT: An emerging project in the NFT market, known for its unique digital art and growing community.

Main NFT markets for investors

• OpenSea: The leading NFT marketplace where you can buy, sell, and mint NFTs. It accepts over 150 payment tokens and offers the widest variety of collections.

• Rarible: Decentralized platform where users can create and sell NFTs, using the platform's native token, RARI, for governance.

• SuperRare: Premium marketplace for digital art operating on Ethereum, focused on high-quality works and selected artists.

• Nifty Gateway: Known for curating collections of digital art, including works by renowned artists like Beeple, with an emphasis on limited editions.

• Blur: Aimed at professional NFT traders, Blur combines a marketplace with a lending protocol called Blend, offering advanced trading tools.

The future of NFTs in the digital ecosystem

NFTs represent a new frontier for ownership in the digital space, with opportunities for creators, collectors, and investors alike. From their unique functionality to their wide range of applications, NFTs are shaping the future of digital art, gaming, and even virtual real estate. The technology continues to evolve with developments such as fractional NFTs and applications in emerging metaverses. However, like all investments in the crypto space, it is essential to understand the risks and conduct thorough research before diving into the world of NFTs.