We’re getting closer to KALA Network NFT Grand Opening. Just a little longer and you’ll be able to buy our exclusive PEN/PENCIL NFT Collection. But before that, we’ve seen many of our users are still confused about NFT. This is why today we have gathered all the most asked questions about NFTs to keep you up to date 😇
What are NFTs?
NFT stands for non-fungible token. A non-fungible token is a financial security consisting of digital data stored in a blockchain, a form of distributed ledger.
For more detail, check out this article.
Do NFTs have any value?
The answer is the same with physical assets such as paintings. The value of an NFT depends on 4 value factors:
- Market-driven value: value influenced by the market trend and popularity of the artist.
- Subjective value: value depends on the buyer, how the art makes you feel.
- Objective value: the unbiased value depends on the technical skill and experience by which the NFT was created.
- Historical value: value depends on an NFT’s historical aging.
All of these factors in on how much an NFT worth. An example is “The Merge” which was sold for $91.9 million.
What are NFTs used for?
NFTs can represent real-world items like artwork and real estate. “Tokenizing” these real-world tangible assets makes buying, selling, and trading them more efficient while reducing the probability of fraud. NFTs can also function to represent individuals’ identities, property rights, and more.
Can I invest in NFTs?
Of course, you can. But like any other type of investment, before you attempt to invest in NFTs, invest in knowing what you’re getting into and start by spending only what you can afford to lose.
What are the risks of NFTs?
Much like cryptocurrencies, NFTs can be seen as a High Risk, High Reward investment type. They are only worth the amount people are willing to pay for them meaning an NFT can worth nothing or millions of dollars. Once again, make sure you know what you’re getting into before investing in NFTs.
Can I make money with NFTs?
NFTs follow the golden rule of investing which is to buy low and sell high. NFTs value changes over time. Whether you choose to buy and sell later or set out to create NFTs, you must first realize how the NFT world works and what would and wouldn’t sell or risk losing money.
Where to buy NFTs?
Some of the best marketplaces where you can buy NFTs include OpenSea, Rarible, Axie Marketplace, and NBA Top Shot Marketplace.
Can I make my own NFTs?
Yes. You can create your NFTs and even sell them for a profit.
The process of creating or minting an NFT is listed below:
Step 1: Choose a platform where your wish to sell your NFT
Step 2: Set up a Wallet
Step 3: Connect your Wallet
Step 4: Create an NFT (the cost of creation depends on the quality and size of the artwork).
Step 5: List your NFT
How much resource/power do NFTs use?
According to research by a computational artist and engineer, Memo Akten, the process of minting NFTs uses over 263,538 kWh of energy on average and causes emissions of 163,486 KgCO2.
What is the impact of NFTs on the environment?
NFTs themselves do not impact the environment, but how they are minted can have substantial environmental consequences. NFT arts are sold and authenticated using energy-intensive computer transactions. These transactions are required for minting NFTs, bidding and paying for the NFT after successful bidding, as well as the process of transferring ownership.
Can I get free NFTs?
There are various ways you can get NFTs for free.
- Create Your Own NFT: With gas fees involve your option to mint free NFTs is through “lazy minting” where an NFT is available outside the blockchain and is only minted after a sale. Some of NFT creators’ most preferred NFT marketplaces for minting NFTs for free include OpenSea and Rarible.
- Play-To-Earn Games: Play-To-Earn Games is another way you can earn free NFTs. Because that is exactly what most of these games are for. Examples of NFT-supported play-to-earn include Mobox, My Neighbor Alice, Mines of Dalarnia, and Axie Infinity.
- Giveaways and Airdrops: Many NFT and crypto projects give away free NFTs as long as you join their social channels and help them promote their projects. You can search NFT giveaways on Twitter by searching for the keyword “NFT”.
Can I copy NFTs?
No, and Yes. While the technology “NFT” cannot be replicated because of security factors inherited from blockchain, the media can be copied easily.
Take, for example, the Mona Lisa painting done by Leonardo da Vinci, while there are many lookalikes and iterations of the original painting, there is no two original Mona Lisa artwork. The same goes for NFT, it’s impossible to fake the creator’s wallet even though copying the contents of an NFT can be done.
NFTs contain unique codes — stored on the blockchain in an immutable form — that makes it possible to trace them back to the creator. Read our detailed article here on where NFTs are stored.
Will NFTs be a thing?
The questions as to the durability of NFTs have generated mixed opinions due to the many uncertainties as regards its use case.
Experts believe that projects based on strong fundamentals are likely to survive the test of time, however, that can be said about weaker ones.
Projects that are most likely to lose the fizz are NFT collections that lack utilities.
Can I make money with NFTs like with cryptocurrencies?
Yes. The real money you get from having an NFT is when you sell it just like with cryptocurrencies.
What is the future of NFTs?
NFT is still relatively new, so its future will always be uncertain. There are many scenarios that could happen: NFT will become prime assets in the virtual world, it will become an established part of the investment world or the market will collapse… Whatever it is, one thing for sure is that NFTs took the world by storm in 2021, bringing forth a digital art revolution while becoming one of the fastest-growing asset classes of the year. So with that information, it’s up to you to decide how this new technology will hold up.
We hope we were able to clarify and answer your questions. Make sure to follow our social channels for the latest news about KALA Network. See you all next time! 👋