Navigating the NFT Marketplace

NFT or Non-Fungible Tokens emerged as a trend of the digital market around two years ago. Unlike crypto currencies like Bitcoin which are fungible, NFTs as a breakthrough to the blockchain technology has a unique character. NFT, once introduced to the market, revolutionized the way of trading and ownership of not only digital assets, but also real world assets or RWA. Even though the NFT market has slowed down recently, the horizon looks bright for the market. As such, it’s a good idea to equip yourself with an appropriate level of knowledge, to take advantage of the next market bull run.

What is NFT?

Non-Fungible Tokens or NFT is quite a new concept in the digital world. As such, many people across the globe have the same question; What is NFT? 

NFT initially referred to tokenizing a digital asset, such as an artwork, a database, an image, etc. The process of tokenizing must be accomplished within a blockchain network such as Ethereum. The token which is backed by a digital asset is an NFT. It has a unique nature and can not be changed or replicated. All relevant information about the ownership, authenticity and trading history will be securely stored within the blockchain network.

The non fungibility nature of NFTs means that every single NFT has a unique data that distinguishes it from other NFTs associated with a distinctive piece of data

What is the NFT marketplace?

Yes, it is simply somewhere to trade NFTs. An NFT marketplace is technically an online platform that enables users to trade NFTs. Sounds simple, doesn’t it? In reality, it is not that simple, as there are quite a few factors that must be in place for a safe NFT marketplace. 

There are many many reputable NFT marketplace out there that you can choose from. A few of them are considered a general NFT marketplace where all kinds of NFTs can be traded. Some others focus on a specific niche, such as artworks or gaming.

There are several elements and important features that are required for a secure and easy to use NFT marketplace. User-Friendly interface, high security measures, perfect integration with smart contracts and digital wallets are the most important features that you must consider, when choosing a NFT marketplace in order to make a secure investment in NFTs.

How does an NFT marketplace work?

• Users create an account in the NFT marketplace platform
• Users must link their digital wallet to their account
• Users are able to either create NFT or just navigate through the platform
• Once NFT is created by users, they can list it for selling to interested users
• NFT is configured and the listing is moderated within that specific marketplace
• NFT appears in the marketplace listing
• Interested users start to bid
• NFT is sold to to the highest bid made
• Marketplace takes care of money transfer from buyer to seller and ownership transfer from seller to buyer

It is worth mentioning that all transactions are being done by smart contracts that are already built within the marketplace platform. The better the smart contracts are developed, the smoother, easier and more secure the transactions will settle.

Different types of NFT marketplace

As the blockchain and its popular products streamline, different types of NFTs are introduced to the market. As such, in addition to general NFT marketplaces that all types of NFTs are there to trade, like mentioned earlier, specific NFT marketplaces are emerging these days, focusing on a specific NFT type. Nowadays, Digital NFTs as well as gaming NFTs are among the most popular NFTs in the market. Popular game characters as well as rare moments of such games are now being tokenized and its NFTs are up for sale in popular NFT marketplaces. Besides, music NFTs are gaining popularity right now, as a specific album or a single track can be converted to NFT and be sold to interested people.

Another NFT marketplace that is streamlining these days is the real estate NFT marketplace. The concept is to tokenize a property to multiple NFTs or tokens, so more small scale investors are able to fractionally invest in the real estate market by purchasing real estate NFTs. 

What Does the Future of NFTs Look like?

Despite the bull run for NFT market back in 2022, the market has been experiencing a meltdown over the past year. There are many reasons such as scam projects, the decline of the cryptocurrency market and market participants’ lack of knowledge that lead to such a downturn to the NFT market. However, as the NFT applications are limitless, the horizon looks bright for this market. NFT’s are expanded from digital assets to real world assets and nowadays, almost all physical assets that have a value can be converted to NFT or fungible tokens. Even in the real estate market, tokenized properties are gaining popularity fast and the usage of NFT in the real estate market for easy and secure fractional property ownership is streamlining.

However, this is not about all NFTs, as the market is still suffering from shortage of knowledge and experience. Hence, be careful and invest in legitimate NFT projects.