How to create NFT art?

The NFT is known as a non-replaceable token, or class of digital asset that represents a unique entity, not replaceable on a one-for-one basis with another token. An NFT is originally based on blockchain technology, which ensures that each token is representative of its authenticity and thus is impossible to counterfeit. While the concept of an NFT can be applied in many forms, it has reached its best-known usage in forms related to digital art, collecting, gaming, and other such forms of digital content.

Key Features of the NFT

Distinct characteristics that define non-fungible tokens.

Uniqueness: Each and every NFT has some information that makes it distinct from other NFTs. This distinction is verified by the blockchain.

Ownership: This opportunity provided by blockchain technology allows recording information on NFT owners to be protected, with transparency and secure rights transfer.

Non-interchangeability: Unlike Bitcoin or traditional money that is interchangeable and holds the same value, each NFT is unique and not replaceable on equal terms with another NFT.

Digital Rarity: Through creating a limited number of copies, creators can make their works rare and, therefore, highly valued.

How do NFTs work?

NFTs are created and managed on blockchain platforms such as Ethereum, Binance Smart Chain, and Flow. When an NFT is created, information about its uniqueness, owner, and transaction history is stored on the blockchain. This information is publicly available and can be verified by anyone.

Whenever anyone purchases an NFT, that person owns a single digital object – along with a record on a blockchain showing who the owner is of that digital object. Example: Digital art, video, music. While it doesn’t preclude others from copying or viewing the digital object in question, only the owner of the NFT has official proof of ownership of the original object.

Application of NFT

• Digital Art: Artists and creators can sell their work as NFTs in return for money. In contrast, buyers take ownership over them that can be verified by a third party.
• Collecting: Be it sports cards or virtual pets, the cases are endless – NFTs allow collectors to own unique digital objects.
• Gaming: In games, unique items such as items, characters, or even pieces of land can take the form of NFTs, tradable on special platforms.
• Music and Entertainment: Musicians and artists are able to use NFT to sell unique recordings, concert tickets, or even exclusive fan experiences. This opens up new opportunities to engage with audiences and monetize content.
• Creative Industries Development: New ways for artists, musicians, and creatives to monetize their work and reach out to the public.

Problems and criticisms

• Environmental issues: The creation of NFTs, and especially their trading on blockchain systems that are energy-intensive like Ethereum, raises concerns due to huge power consumption and negative environmental impacts.
• Market bubbles: High demand for and speculative interest in NFTs may lead to market bubbles, which make investing risky.
• Legal problems: The question of copyright and distribution of copies is so complex that it still needs further development in terms of a legal framework.

NFTs are a new, thrilling stage in the evolution of digital content that opens absolutely new horizons for creators and collectors alike. Like any other novel technology, they hold both promise and risk. It is very important to invest with one’s eyes open regarding the potential and limitations of NFTs and to be able to keep up with changing legal and ecological standards related to new technologies.

Consequently, the NFT is not only a fashion trend but also a serious step in the world of digital assets because such a token can bring really sharp changes to many spheres of culture, arts, and entertainments.

How to create an NFT?

NFTs or Non-Fungible Tokens are some sort of unique digital material existing on the blockchain and testifying about the ownership of some real digitally existing object or some sort of right. The creation of NFTs opens completely new perspectives for artists, musicians, photographers, and other creators in monetizing their work. In this guide, we are going to walk through the process of creating an NFT step by step.

Tips for Successful NFT Creation

Authorship and Originality: Ensure your work is unique to avoid legal issues.

Market Research: Stay updated on trends to understand your asset’s value and timing for sale.

Community Participation: Engage with NFT and blockchain communities for increased visibility and potential buyers.

Concern for the Environment: Consider using eco-friendly platforms for NFT creation.

NFT creation represents an exciting opportunity for creators to monetize their art and ideas in the digital world. By following this step-by-step guide, you can turn your digital assets into NFTs and start promoting them. With all these opportunities, one must take into consideration the associated risks and be responsible with the choice of platforms and revenue management. The world of NFT is not only about creativity; it is about strategy and promotion also. This brings us to how one can buy an NFT.

How to buy NFT?

NFTs, or non-replaceable tokens, are unique digital assets stored on the blockchain. It could include everything from art, music, and videos, among many other forms, when it comes to the creation of an NFT. Buying NFTs is fast becoming one of the most popular ways to invest, collect unique digital items, and support creators. In this article, we go over how to buy an NFT, from choosing a platform to actually making the purchase.

Tips for NFT Buyers

Essential advice to consider before purchasing NFTs.

Do your research: Before buying an NFT, research the origin of the asset, the creator, and sale history as much as possible. This will help you evade buying counterfeits or unpopular assets.

Understand the risks: Like any investment, buying NFTs comes with risks. The NFT market could be highly volatile, and thus its value could appreciate or depreciate.

Consider fees: Transacting in NFTs comes with a fee in Ethereum gas and marketplace fees. You should be able to factor the fees into your purchase.

Stay updated: The NFT market is one of those that keeps on changing, and each day new projects are introduced, so are the opportunities. It’s essential to know the latest news to maximize your investment.

Purchasing NFTs gives one access to singular digital assets and is the opportunity to support creativity and innovation. The steps above and additional tips will help you make considered purchases in the world of NFTs and manage your collection as required. Whether it is done for profit or for being part of a new era in digital art, this process should be done with care and responsibility.

How to buy and sell NFT?

NFTs are non-replaceable tokens, meaning no identical or replica creation of any NFT is made. Examples of such assets include but are not limited to art, music, and video games. The concept is growing in interest day in and day out. Increasingly, people have been wondering how one goes about buying and selling NFTs. The following is a step-to-go guide on how to buy and sell an NFT.

Handy Tips for Successful Sale and Purchase of NFTs

• Diversification: Never keep all your money in one NFT. Diversifying can reduce risks.
• Research: Do a critical analysis before buying or selling an NFT regarding the originator’s history, asset uniqueness, and its future potential.
• Fees accounting: Be aware of the cost of transaction and gas fees, as well as marketplace fees that can significantly impact the overall cost of transactions.
• Security: Be cautious of phishing attacks and scammers. Use trustworthy platforms and ensure your wallets are protected.

The process of buying and selling NFTs is really amazing, as it opens completely new spaces for creation and gathering. Whether you’re looking for the ABCs or to source information on the very process of buying and selling NFTs, this guide is just what you need to start exploring this fast-growing market. Remember that success in the world of NFTs requires much more than financial investments-it needs a deep understanding of the market, strategy, and time.

What is an NFT?

A non-fungible token or, in short form, an NFT, is one version of a digital collectible which applies blockchain technology to prove ownership over some sort of digital object or right. Unlike classic cryptocurrencies, such as Bitcoin or Ethereum, they are traditionally fungible and hence could be divisible into smaller parts, while each and every NFT is unique and can’t be replaced with another one on equal terms. Due to this uniqueness, NFTs are really appealing for collecting digital art, music, videos, and all forms of digital content.

How Do NFTs Work?

NFTs are created and managed on a blockchain, usually Ethereum, though other blockchains supporting NFTs include Flow and Tezos. Each NFT has embedded meta-information that might show the location of a digital object, such as a URL to an image or video, and may contain additional information, such as authorship, history of ownership, and usage rights.

In creating an NFT, information regarding ownership and uniqueness is registered on the blockchain, which introduces transparency and the trust of ownership not being altered. Whenever an NFT changes hands, by sale or transfer, even this goes on the blockchain, updating the ownership record.

Application of NFT

NFTs are finding applications across a wide range of industries where the use might be beneficial. A few of them are mentioned below:

• Digital Art: NFT is utilized to sell the rights of unique digital art by various artists and galleries many times with proof of authenticity and ownership.
• Collecting: everything from tradable trading cards to virtual real estate in digital worlds, anything can be enabled for users to collect and trade unique digital objects with NFTs.
• Games: inside digital video games, NFT represents a unique item, character, or skill that will surely be tradable outside of the game.
• Music and Entertainment: The usage of NFTs has started by filmmakers and musicians to sell exclusive content among other items and to build fan engagement.

Pros and Cons of the NFT

The future of the NFT

Despite current issues and challenges, NFTs continued to be in the focus of attention in the arts and entertainment sectors, as well as in broader areas of education, real estate, and document management. The expected route of development and proliferation in these spheres is linked to technological advances aimed at blockchain power consumption reduction and scalability enhancement, but also to the development of new standards and legal frameworks.

NFTs opened a new chapter in the digital world and showed a unique way to represent ownership, authenticity, and rarity in the digital space. So far, they have given opportunities to millions of digital content creators worldwide to monetize their work directly and on new terms. At the same time, just like any pioneering technology, NFTs are facing several challenges, starting from environmental problems and high market volatility to legal uncertainty. While society and technology are ever-changing, NFTs will also always be changing in nature to better accommodate what is important to their users.

When were the first NFTs created?

During the recent years, NFTs have gained great attention, if not popularity, in the world of digital assets and art. They are unique digital assets certified on a blockchain-a guarantee of their authenticity and uniqueness. The story of NFTs started long before they became that widely known and commercially successful. Let’s investigate when the first NFTs were created and what events fueled their creation.

Early Experiments and Colored Coins

One of the first experiments, before the advent of NFTs, had been the so-called “Colored Coins” on the Bitcoin blockchain in the years around 2012-2013. “Colored Coins” could be used to represent everything from asset ownership to company shares, and could even be used as a means to create and trade digital collectibles. However, developers soon moved to other platforms in creating unique digital assets, as Bitcoin was not able to support complex smart contracts, neither recording additional information about the token.

The Emergence of Ethereum and the First NFTs

Further development regarding the Ethereum platform, which was launched in 2015, became an important milestone for the NFT history. Due to the flexible environment for creating smart contracts and tokens, Ethereum was an ideal environment for the development of NFTs.

Those first projects that can be called NFT in the modern meaning of the word were the following:

• Quantum (May 2014): This is considered one of the first NFTs, created by artist Kevin McCoy and programmer Anselm Wenger. Later, this digital art object was sold at the Seven on Seven conference in New York for $4. Ownership registration was with the help of the Namecoin platform.
• Etheria (October 2015): One of the first projects, launched shortly after Ethereum itself had launched, to prove out the concept of digital ownership and trading of parcels of virtual land on the blockchain.
• CryptoPunks (June 2017): Larva Labs’ CryptoPunks project launched 10,000 unique algorithmically generated characters. Though free at the time of initial distribution, over time some of these digital characters have resold for hundreds of thousands of dollars.
• CryptoKitties (November 2017): CryptoKitties is among the very first viral projects in the world of NFT, wherein users were allowed to purchase, collect, breed, and resell virtual kittens. That project brought not only immense attention to NFT but also revealed the scalability of the Ethereum blockchain when, during peak times, the game noticeably slowed down the network due to a great number of transactions.

Thus, with NFTs gaining widespread attention, a juncture came when standards would be imperative for the wide adoption and interoperability of the NFTs across platforms and markets. Regarding this, on the Ethereum platform, the creation of ERC-721 and ERC-1155 token standards was very well achievable. The potential creation of ERC-721 and ERC-1155 token standards on the Ethereum network was a major response in this regard.

• ERC-721: Proposed in late 2017, ERC-721 is a standard for creating non-interchangeable tokens within Ethereum and defines a basic structure to record and move around unique assets.
• ERC-1155: Released in 2018, the ERC-1155 standard made it possible for interchangeable and non-interchangeable tokens to be deployed together under a single contract, allowing for a jump in convenience and new applications for NFTs in gaming and beyond.

Since then, NFTs have taken digital art and culture by storm. The technology has provided a channel for artists, musicians, and other creatives to monetize their work directly through digital ways. Record sales of NFT artworks for millions of dollars, like Beeple’s Everydays: The First 5000 Days, which went for more than $69 million at Christie’s auction this March 2021, prove the market for this new kind of technology and show the interest of collectors in digital art.

The NFT story, born with pilot projects and the elaboration of key technology standards, constitutes today the backbone of the modern ecosystem for non-interchangeable tokens. Today, NFTs are a serious cultural and economic phenomenon that receives considerable attention from a lot of fields, including art, music, and gaming – and many others outside these. Though sure to continue its uphill and downhill course, the NFT market definitely leaves its irreversible impact on the digital economy and culture.

How to monetize NFTs

Non-Futurable Tokens are unique digital assets, certified on the blockchain, which guarantee their authenticity and uniqueness. Due to the great popularity of NFT, they have turned from a means of collecting some works of digital art into a powerful tool for earning money. In this article, we will review some methods of making money with the help of NFT.

The NFT market opens weird earning possibilities, yet in this field, success needs deep knowledge, a strategic approach, and understanding of trends. Whichever route you decide to take, never stop learning, keep an eye on the market, and try to be creative. Keep in mind that the NFT world is still in baby shoes, so new trends in the future may reveal, up until today unimaginable, ways of generating profits.

How to Create Your Own NFT?

Creating your non-replaceable token has turned into an affordable way for artists, musicians, writers, and generally any kind of creators of digital content to monetize their works through blockchain technology. NFTs confirm authenticity, uniqueness, and the ownership of a certain digital asset, opening new horizons for digital art and collecting. Learn in the given article how you can create an NFT step by step.

Creating your own NFT opens up new avenues of revenue streams for artists to sell their work and move into the rapidly growing world of digital art and collecting. By following the above process, you are thus able to breathe life into ideas and introduce them into the global NFT market place.

Working principle of the NFT

An NFT is a non-replaceable token—the unit of accounting to create a digital cast for a unique item: paintings, photos, videos, music, and gifs. Such items have great value among collectors, gamers, and art lovers. They are bought and sold through auctions.

NFT tokens are stored in a blockchain, which is a huge chain of blocks, each carrying information.

A token is a record in one of the blocks, and as a rule, there can be plenty of them. But what if you need to create a unique token that has no analogues? The answer is NFT.

NFT token—a unique thing that has moved from the real world to the virtual world, to the blockchain. Each of them is unique, inseparable and exists in a single number.

How files are converted to NFT tokens

There is a great quantity of tokenization platforms. Some of them have narrow specialisation, like only game items or art.

The most famous are OpenSea, SuperRare, Foundation, and Rarible. As a rule, the sites take some commission for Ethereum cryptocurrency, or ethers, as it is shortly said. Its size is different, but normally it’s some tens of dollars. Such a cost comes because each token, being new, has to be added to the blockchain.

As a rule, commission is charged when creating a token. Sometimes on some sites, the money is paid immediately after uploading the file or after the sale.

How to monetize NFT

First of all, NFT tokens are an opportunity to earn good money. Authors sell their virtual works to gamers, athletes, collectors, stars, politicians, and other wealthy people. The main goal is trying to monetize the popularity of a particular token.

Create your NFT token yourself

You can create and publish tokens in OpenSea, Rarible, and SuperRare.

The universal guide for both platforms:

1. Create an Ethereum wallet: At the minimum, you’ll want to have enough ETH to cover the creation and transfer fees of your NFT.
2. Create an Art/Collectible: Create any digital art in your favorite design editor; this could be Photoshop, Illustrator, or Procreate. Save the work in a compatible format and then sell that as an NFT.
3. Squeeze one of the platforms, connect your cryptocurrency wallet, and after paying commission, place the token and wait for sales.

Free token giveaway

The other way to earn money on NFT.

A lot of new platforms, entering into the crypto market, try to lure users with free giveaways of their own tokens.

Usually they are used to pay for goods and services on the site. But there is a situation when tokens turn into a full-fledged cryptocurrency.

Services for token creators

Every day millions of people create new NFT tokens in order to earn money on them, but far from everyone succeeds. Even if the token is valuable, not every creator knows how to sell it.

This at least somehow helps crypto-producers – people who have extensive experience in the sale of tokens and work with trading platforms.

If you have such skills, try to promote newcomers. You can find them on thematic forums, trading platforms and social networks.

Selling tokens in order to obtain cryptocurrency

The main feature of this way of investing is that after selling cryptocurrencies, you don’t withdraw money right away but buy new electronic currencies for it. Then you just wait until the token grows in price and sells at the highest possible value.

The only minus – behavior of cryptocurrencies is sometimes hard to predict, and you may have to wait very long until tokens jump in value.

Copyright and critique of the NFT

Among the primary reasons to criticize NFT is the pretty unclear relation of tokens to the copyright. People buying NFTs are often thinking: “do I now own the rights to something?” No.

NFT does not give any rights in the ownership of an item beyond the borders of this blockchain platform.

More than 10 years ago, a Nyan Cat video appeared on YouTube. Quite soon, this video gained great popularity and was remade into a meme. This video depicts an animated cat flying across the sky with its trail of rainbows. Last year, Christopher Torres, the author of the video, sold the NFT-gifku with his brainchild for $580,000.

But there is nothing to stop you from watching the video on YouTube, downloading it, or using the cat as a screensaver; you won’t get sued by the token owner.

Another excellent example is the film Pulp Fiction by Quentin Tarantino. Not so long ago, the director announced that he intends to sell the cut scenes in token form. Whoever buys it gets a special digital artefact that he can use as desired inside the platform.

Of course, it is yet to be legislatively determined how tokens relate to copyright, but unlikely you will have to pay the holder of the token to watch the same scenes online.

Yes, after buying tokens timed for some films or art objects, we can still use them, but that does not matter. The most valuable thing in the NFT is exclusivity. Nobody has a token like yours, and all the information about it is recorded with security on the platform. For collectors, art, or gaming enthusiasts, this is like buying an original.

Risks and pitfalls in the NFT

This, in turn, does not differ much from investing in high-risk assets in terms of the danger level. A proof was the market crash in 2020-2021 and slow, uncertain recovery that is still going on.

The three main risks are:

• Market volatility due to sharp drops and rises in value. Rash investments will bring losses rather than profits;
• Hacker attacks and fraud stimulated by the fierce desire to cash in on the extremely high prices of NFT collections. In May 2022, fraudsters stole 29 Moonbirds NFT tokens for 750 ETNs;
• Complexity of studying the sphere: the indicators that form the value of an NFT-asset are ambiguous and depend on dozens of factors. Choosing the right token to invest in this market is many times more difficult than choosing an instrument on a traditional stock market.

In this context, the interest in this topic is just growing: platforms announce all kinds of innovations and attract investors, while artists and musicians think about how to monetize ideas.

Many questions still remain about the rules under which blockchain shall play: there are still copyright issues to be resolved and possibly contents distribution formats to be reconsidered.

What is NFT in simple words

NFT stands for Non-Fungible Token, meaning a unique token representative of some kind of digital asset on the blockchain. Speaking in simple terms, an NFT is proof that one owns an original digital object: a picture, video, audio, or, say, an item in a game. That means, figuratively speaking, the NFT is some kind of virtual certificate that first allows its owner to claim the copyright for a certain digital object he or she has either created or bought—yes, NFTs are bought and sold.

Blockchain: A distributed database that uses cryptography for data security and integrity. A blockchain is a set of blocks where every block carries some information, like transactions in some cryptocurrency system. Each block will contain information about the previous block—a so-called hash—providing, in a way, a link between blocks and thus making a chain of blocks. That is where the name “blockchain” originally came from: blockchain in English means “chain of blocks.”

The most important advantages of blockchain are that it is a decentralized system by design; it has no main control center. It implies that data storage and processing are widely distributed among nodes of the network, enhancing its security against hacking and fraud. Besides, blockchain cuts down the cost of processing a transaction and speeds up the process of data exchange. Thus, it turns out to be in demand in an enormous number of technologies.

Key Features of NFTs

• Unique: NFTs are unique and can’t be replaced by another token, distinguishing them from cryptocurrencies like Bitcoin or Ethereum, which are fungible.
• Digital Copyrights: With NFTs, content creators can take ownership of their works and sell them as unique tokens. Ownership of an NFT grants entitlement to the digital copyright of an object on a specific blockchain, benefiting artists, designers, musicians, writers, and collectors.
• Reliability of Storage: NFTs are stored on the blockchain, a decentralized and distributed network. This ensures that information about the token and its owner is securely stored and not reliant on any central server or organization.
• Transparency: The blockchain allows easy viewing and verification of an NFT’s ownership history, creator, and previous sellers. This fosters trust between buyers and sellers and confirms the authenticity of the registered asset.

NFTs recently gained extremely high popularity and are now actively used in different fields, such as art, gaming, and collecting. Thus, if you want to monetize your art or maybe turn some hobby into a professional activity with online income, it is at least worth your attention to this modern technology. Also, NFT develops very fast, that’s why its application will most likely be extended to other areas, too.

NFTs: What are they, and how do they work?

Although the technology behind NFTs has been long known, NFTs reached mass-market attention in 2020. Their popularity has been growing ever since, particularly in the digital arts environment. Still, huge interest in NFTs contrasts with the criticism of their volatility, high speculation, and fraud schemes. Here you’ll find everything you need to know about NFTs.

What is an NFT?

NFT can be deciphered as a non-fungible token. A non-fungible token expresses the meaning of uniqueness and inability to replace one object with the help of another. Physical money and cryptocurrencies differ in that they can be changed with equivalents, while it is impossible with NFTs. Every NFT has a digital signature making the token unique. The NFTs may possess any form of digital asset; they are a photo, a video, an audio file, or other types of digital file format. NFTs are given to artwork, comic books, sports-themed collectibles, collectible cards, games, and more.

How does the NFT work?

NFT tokens are some form of crypto assets on blockchain—a distributed public registry for recording transactions. Every NFT has an incorporated unique identification code, separating one token from another. Such data allows verification of ownership of a token and its transfer to another owner.

Supply and demand—namely, market—determine the value of NFTs, and they can be sold and purchased much like physical assets. Being digital representations of assets, NFTs can be created based on tangible real-life assets such as real estate or art. Some users believe that representing real tangible assets in token form increases the efficiency of their buying, selling, and exchanging, and at the same time may potentially reduce fraud.

How do I purchase the NFT?

The NFT market is considered a high volatility market with sudden changes in price and can be dangerous for even advanced investors. In case you are willing to buy NFT, you should know well what you will face. Let’s go through the general steps.

Crypto Exchange Account Creation

The first thing to do is to sign up with a cryptocurrency platform or exchange. A crypto exchange is a platform where you can buy and sell a variety of cryptocurrencies. You will be required to create an account on the platform from which you want to buy NFT. There is some differentiation between the various platforms in the variety of services offered, and as such, it will be worth your time to research these and select one that best fits your needs concerning functionality, fees, and conditions of support.

Open a Cryptocurrency Wallet

A cryptocurrency wallet is designed for storing access keys to your digital assets. The user gets a unique passphrase to gain and regain access to the wallet. It is of great importance to safely store it, since without the passphrase, one will lose access to his digital wallet.

Wallets may be hosted on exchanges, or they may function independently of the exchanges. You are responsible for the safety of the wallet and the private keys when it is an independent wallet. Digital wallets that are on an exchange mean the exchange itself acts as an intermediary for digital cryptocurrency transactions. In this case, it is the exchange that holds your private keys and is responsible for the security of your assets.

For buying and selling NFT independently, without third-party services, it is necessary to use a wallet directly connected to the blockchain. This kind of wallet allows for direct transfer of the cryptocurrency between users through means of a public key. Funds can be stored in two ways: “hot wallet” and “cold wallet”.

Hot Wallet:

• A software-based wallet or, respectively, a web application
• Can be used both as a desktop and mobile application, or as an extension in a browser
• Less protected from cyberattacks, compared to a cold wallet

Cold Wallet:

• Hardware wallet, physical device not connected to the internet
• More reliable
• However, such a wallet is easy to lose; also, there is no backup recovery option in case the unique phrase is lost

The wallet should be compatible with the Ethereum blockchain and its native cryptocurrency, Ether (ETH, Ethereum), since this is the platform on which most NFT trading takes place.

Transfer Ethereum cryptocurrency to a crypto wallet

Once you’ve found your NFT exchange, after finding some ETH cryptocurrency, it’s time to deposit the cryptocurrency into your wallet. Steps depend on the exchange you buy ETH cryptocurrency from, your wallet, and the marketplace where you’d like to trade your NFT.

Get the NFT

After connecting a cryptocurrency wallet and funding it, one is already ready to purchase an NFT. With the purchase of an NFT, one automatically becomes the owner of this token. However, the holder of an NFT has no other rights to the artwork itself, such as the right to modify or reproduce, except in cases when this transfer of rights has been directly agreed upon by the buyer and the author of the artwork. Depending on the marketplace, an NFT might be allowed to be free or, vice versa, could be forbidden from doing a number of things.

What is an NFT Marketplace?

The concept of NFT marketplace is continuously evolving and essentially, as is the case-the concept of NFT marketplaces is shared in a combination of three major types:

• Open Marketplace – anyone can buy, sell, or create NFTs. The most typical use case of NFT creation is unique publication of a token on the blockchain; after that, such NFT can be resold. In open marketplaces, the procedure of NFT creation is normally performed either by the marketplace itself or by the authors of the works.
• Closed Marketplace – In the case of a closed marketplace, creators of work submit an application to a marketplace, which then generally assumes the production of the NFT. Herein, there is a greater extent of limitation on selling and trading.
• Proprietary Marketplace – These types of marketplaces sell NFTs that are covered by trademarks or copyrights of the company operating the marketplace.

Some traders in NFTs open accounts with several of these marketplace websites, then register for notifications so that they will know instantly when new NFTs are on the market. The news about fresh releases also spreads on the platforms, including Discord, Twitter, and also on two specialized investment forums: Rarity Sniper and Rarity Tools. After the hotly awaited NFTs have released, investors rush to grab them.

Most markets would have guides on how to use their websites. Once you have signed up for a marketplace account, you should be able to attach your cryptocurrency wallet to it. Some marketplaces even allow the creation of a new wallet on their website or the use of proprietary wallets. Sometimes, when using proprietary wallets of marketplaces, discounts are given or more favorable rates compared to using external wallets.

Examples of the NFT marketplaces

There are tens of different NFT marketplaces on the market. Here are some examples of them:

Popular NFT Marketplaces

OpenSea: OpenSea is one of the largest NFT marketplaces, offering a variety of NFTs, including art, music, fashion, sports, games, and collectibles. The marketplace provides tutorials for users on its website.

NBA Top Shot: This marketplace is tailored for sports fans and focuses on trading video clips of basketball games. NBA Top Shot has a large active user base and organizes contests and competitions to foster community engagement.

Nifty Gateway: Nifty Gateway offers collections from renowned creators in video, multimedia, fine art, and animation. The platform is designed for buyers interested in collecting art with long-term value.

Rarible: An Ethereum-based platform for creating, selling, and purchasing rights to digital art objects using NFTs.

NFT scam

NFT scams are quite common. The most common schemes include the following:

• Phishing – fake links and pop-ups advertising new NFT projects and issues on social media.
• Catfishing – advertising of new NFT releases and collections through fake marketplace websites, social media accounts, and scammers posing as celebrities.
• Faux NFTs – fraudsters sell other authors’ work, passing it off as their own.
• Market swing schemes (“pump and dump”) – fraudsters whip up a frenzy of interest in NFTs, artificially inflate demand for them to drive the price higher, and then suddenly sell their NFTs to leave the other buyers with valueless assets.
• Zero commission for NFT creation – scammers employ techniques of forcing users to take part in a ‘zero commission’ fake promotion for the creation of an NFT. However, instead of saving on the fee and receiving the NFT, the victim hands over the rights to manage his cryptocurrency wallet to the fraudsters.

How to protect yourself from the use of NFT scams:

• Follow general cybersecurity advice, such as using strong passwords and two-factor authentication.
• It’s more convenient to store cryptocurrency on exchanges, but it’s safer with a cold wallet, which is basically a hardware device that keeps keys and assets stored offline.
• Before investing big money into NFT, do a small-value trial transaction first to make sure everything goes as expected.
• Ignore spam, like private messages or unexpected NFT from unknown senders – the latter can contain malicious smart contracts inside.
• Study information about security measures that protect your data and cryptocurrencies before buying NFT. It’s recommended to get familiar with online guides, reviews, and testimonials in order to gauge the risks of this market and how it works.

In 2021, the NFT market increased exponentially, up to an estimated volume of about $22 billion, 280,000 buyers and sellers, and 185,000 unique wallets. On the other hand, as this market is expanding, so does the avenue for cybercriminals it opens. More and more cases of fraud are reported about NFTs, especially related to art and games. This article will discuss NFT and how one may keep him/herself away from NFT scams.

NFT is a non-fungible token. In that context, the word non-fungible means unique, for example: bitcoins are fungible – one bitcoin can be replaced by another one, they have the same value, while an NFT is not fungible – it’s unique and cannot be directly replaced by another NFT. An NFT can be in any form: a photo, a video, an audio file, and many others. This is also a source of excitement about NFTs: the use of technology in selling and collecting digital art.

An NFT per se is a digital asset. The foregoing aspect accentuates that an NFT is a token. When one purchases an NFT linked to a digital asset, he doesn’t own the asset and is not allowed to reproduce or commercially use the asset. One becomes the owner of the record of purchase on a blockchain, which a person can keep or sell to another person.

How does the NFT work?

NFTs are built using a blockchain – a recording of transactions kept on multiple computers – and are linked to a web address, such as an image file. Most NFTs are stored on the Ethereum blockchain, but other blockchains are also supporting them.

NFTs have been created from digital objects, tangible and intangible entities. These include:

• Objects of art
• Gifs and memes
• Video
• Collectibles
• Virtual avatars
• Music

And this is far from an exhaustive list, since an NFT can be based on virtually any object: recently, Twitter founder Jack Dorsey sold an NFT based on his first tweet for over $2.9 million.

NFTs represent the digital version of what could be a collectible; instead of receiving an artwork from the artist to hang in their own place, a buyer gets a digital file entitling him or her to its ownership – similarly to how it is impossible for more than one person to be an owner of an NFT at any one moment in time. Ownership can be verified by unique data embedded in each NFT. Owners and creators can also store some information in the NFT; for example, metadata of an article NFT might include a signature from its author or owner.

To collect NFTs, you’ll be needing a digital wallet that stores both cryptocurrency and NFTs. You are also going to need cryptocurrency to buy NFTs. There are trading platforms where you can view and trade NFTs. OpenSea, Rarible, and Foundation probably rank among the best-known. There is a perception that NFT is a means of supporting digital art, but then again, any transaction in blockchain entails resource consumption. Transacting in NFTs comes with its risks, as shall be seen with NFT fraud.

Both cryptocurrency and NFT are under-regulated areas, and attackers can use their vulnerabilities to commit fraud. Some NFT-related pyramid scheme cases, OpenSea fraud, NFT financial fraud, and many others have been in the news. Some of the most famous cases of NFT fraud are described below.

Fake sites

Third-party trading platforms, like OpenSea, enable NFT transactions and guarantee safe and secure transactions. However, attackers may create fake trading websites that could appear to users as the correct web address. The obvious parts of an NFT – visual images and text information – can easily be copied, which results in a possibility to make the fake marketplace website appearance very similar to the original site.

Defrauding investors

Investor fraud is a scheme wherein heavy advertisement over social media is made about some asset, by which its price goes up and then after getting the money of investors, it stops the support that caused it to fall in value, thus causing loss to the investor. A variation on this is when creators of NFTs block the possibility of reselling a token: they write code that restricts sale activity; buyers are then left with an asset they cannot sell.

Market swing schemes (“pump and dump”)

Market-shaking schemes involve the deliberate buying up of NFTs to artificially hike demand. Unsuspecting buyers, thinking that NFTs have value, enter the auction and begin to place bids. Once the price of an asset goes up sufficiently, fraudsters sell the NFTs with profits and buyers receive assets of no value.

Phishing scams

Before buying NFT, you need to register a crypto wallet. NFT phishing usually is carried out with the help of fake ads, for example, in messengers Discord, Telegram, and public forums, which ask for keys to a personal wallet and a 12-word security phrase. Besides, fraudsters can impersonate MetaMask wallet support and send fake emails warning that the wallet will be blocked due to security issues. Such emails ask you to confirm your account by clicking on some link. The NFT phishing scam is designed to access personal data and funds in a digital wallet.

Helpdesk fraud

As it is with phishing, here the attackers impersonate technical or customer support staff of some blockchain trading platform, and they may reach out for unsuspecting users in a chat on Telegram or Discord. Under the guise of helping to solve problems, fraudsters send links to fake, but very similar to real sites, in order to obtain personal data and access to cryptocurrency wallets. They can also ask you to send a screenshot for the solution to the problem. In fact – what they want is to get the cryptocurrency wallet credentials.

Price fraud

Price fraud may also be committed in the resale of purchased NFTs on the secondary market. Upon publishing a bid to sell the NFT, bidders may change the offered selling currency to a cryptocurrency of lower value without asking the seller, thereby potentially allowing the seller to incur losses in case he does not double-check the currency prior to closing the transaction.