If you have an interest in NFT trading and betting, then we suggest that you take a look at our top guide at all things NFT, as well as the various marketplaces that are available out there.
What is an NFT?
NFT stands for “non-fungible token”. By utilising the Ethereum blockchain as a ledger, you can buy and sell digital items and track their ownership. Though many people think of an NFT as being a piece of artwork, an animated song, or parts from a video game, the blockchain cannot record all that information.
A Concise History of NFTs
The first NFT artwork was created in 2014 at a live event at the New Museum in New York, by a couple of digital artists, Kevin McCoy, and Anil Dash. This was well before there were any crypto art markets. A year previously, the idea of NFTs was born out of a desire to represent real world assets on the Bitcoin blockchain. These were called, “coloured coins”.
The next major step in 2017 was to allow anyone to post works that would live eternally on the Ethereum blockchain. Thanks to the introduction of smart contracts within the NFTs, then a decentralised art marketplace evolved.
How Does an NFT Work?
The NFT token itself stores very little information. What it does is to point to the name of the owner, the artist’s name (if it’s a piece of art) and where you can find it on the web. In other words, it’s nothing more than an internet link that points to information. In most cases, it doesn’t even store this information on the blockchain.
Ethereum and the Blockchain
The vast majority of NFTs live on the Ethereum blockchain. Look upon this as a public ledger that records transactions. Records on the blockchain cannot be overwritten, meaning that they are immutable. The value of these tokens is dictated by the marketplace. They can be bought and sold, passing ownership of the item to a new owner, whose ownership status in then recorded on the blockchain.
These are digital contracts which set out terms and conditions between users. Because storing data on the blockchain is expensive, then embedding a picture on the blockchain is simply not possible.
So, a smart contract exists within the NFT’s code which doesn’t need a third party in order to execute contract terms between the buyer and seller. These contracts can also be used for such things as public record keeping, health care management, legal contracts and real estate transactions.
How is NFT Trading done?
If you’re looking into how to get into NFT trading, then the buying and selling of tokens takes place on one of the many marketplaces available. Once you’ve selected what you want to buy, then send over the funds from your digital wallet. Once the transaction is verified, then the NFT code will appear in your wallet. You should know that he sale will be permanently recorded on the blockchain.
NFT Trading Platforms
Without a doubt, peer to peer markets are the best places to trade NFTs. These connect buyers and sellers together, allowing a direct exchange of tokens. This means users avoid having to pay any fees to third party marketplaces. The most popular NFT trading platform marketplaces of 2022 are OpenSea, Rarible and SuperRare.
Many marketplaces will require listing fees, as well as what are known as “gas fees” for sending crypto from one wallet to another. It’s important to note, that if the Ethereum network has lots of traffic, then these gas fees will increase alarmingly. Uploading an NFT to a marketplace can cost $30, with many going higher than $200. Moving crypto from one wallet to another normally costs around $1-$2 in NFT cryptocurrency fees.
How do I Buy an NFT
There are several factors to consider before you jump in and start buying NFTs. The first is where you intend to buy them from. Then ask yourself if you’ll need a crypto wallet in order to connect cryptocurrency to the sales platform. Now you need to see which cryptocurrency can fund your wallet. And finally, check if there’s a limited time period for the sale.
An example of all these steps would be if you wanted to purchase an NBA Top Shots pack. These are the equivalent of NFT trading cards.
- 1First, you will need to open an account with NBA Top Shots.
- 2Then, make sure you create a Dapper Wallet.
- 3This wallet needs to be funded with either the stable-coin USDC or any of the supported fiat currency options.
- 4Unlike financial betting, when you purchase NFTs you can not utilise stop losses to halt their value from falling.
- 5Finalize your purchase and receive the NFT Trading Cards.
How do I sell an NFT?
If you’ve purchased NFTs and you want to sell them, here’s how you do it:
- 1First find the art piece you have previously listed with OpenSea, for example.
- 2Right click on the item and choose the sell icon.
- 3You’ll be taken to a page where you can list all the terms and conditions of sale, as well as stating whether you want to sell for a fixed price or run an auction.
- 4By clicking on the edit button, you can change and implement various attributes, such as royalties for creating passive income streams from future sales.
The Uses of NFTs
NFTs have developed to have several uses. The Ethereum blockchain is quite slow in comparison to another platform, such as VISA for instance. While the former performs 30 transactions per second., the latter can perform 1,700. Let’s look at some of the uses of NFTS.
- Digital Content/Art
- Digital Content/Art
NFTs were first touted as a magical solution to allow digital artists to finally be able to make a living from their work. Artworks are put up for sale on platforms like OpenSea. Then buyers can purchase it, although not the artwork itself as that’s normally already all over the internet as a JPEG. In fact, with a right click, anyone can save it and enjoy it. The NFT is a receipt to show that they “own” the original.
- Gaming Items
- Gaming Items
Some video games like Counter-Strike and Ghost Recon sell NFTs in the form of items and skins. These sales are then recorded on the Ethereum blockchain. Though there has been lots of talk about NFTs in games, very few games producers have actually implemented anything concrete.
- Investment and Collateral
- Investment and Collateral
If you happen to own an NFT which has real world value, then you’re able to take a real money loan against it. Though it sounds like a great idea, it can be very volatile. Furthermore, most NFTs are not registered as securities with the SEC, meaning they cannot be traded as collateral.
- The Metaverse
- The Metaverse
There appears to be a new metaverse platform being created on an almost daily basis. Take a look at Decentraland, Next Earth and Sandbox. The idea is to make a similar world to that of Steven Spielberg’s movie, “Ready Player One”. A place where anything and everything is possible.
You can interact as a digital version of yourself called an “avatar”, with your first-person experience being viewed through a VR headset. In these virtual worlds, NFTs represent items that can be serve a purpose, like clothing, transportation and even land. As an owner, you can be trading NFT assets for a profit.
NFT Sports Betting
Recently we’ve heard a lot about NBA TopShots. These are NFTs of major TV moments in NBA ‘s recent history sold as tiny video clips. By the way, you don’t actually get the clip, just a receipt saying that it’s yours. Many US football and UK soccer teams have also their own NFT collections. These are often in the form of “Fan Tokens”, which are not technically NFTs, because they are exchangeable. Maybe in the future various sponsors, such as the Premier League Sponsorship will venture into NFT betting.
With so many teams being sponsored by cryptocurrency companies, it’s no surprise that new products are being constantly introduced. Many of today’s most reputable online sports books are happy to accept cryptocurrencies as an option for funding customer’s accounts. But as far as traditional NFT sports betting goes, no one has devised a method for sports wagering utilising NFTs – yet.
How is an NFT Different From Cryptocurrency?
These are two totally different entities, though it could be argued that NFTs are a subset of cryptocurrencies. For a better understanding on utilising crypto such as Binance Coin betting, then please check out our crypto betting guide.
|💚 Each NFT has its own digital signature. Meaning it can’t be copied or exchanged for another||💚 Cryptocurrencies are “fungible” meaning that they can be traded for another of equal value.|
|💚 An example would be the real world painting of the Mona Lisa. Only one exists and it cannot be exchanged for another.||💚 For example, one Bitcoin has equal value to another Bitcoin. In the same manner one dollar always has equal value to another dollar.|
Why Have NFTs Become Popular?
Though NFTs first came onto the scene way back in 2015, it’s only recently that they have been swept up along with the whole cryptocurrency craze. Social media has had a massive effect of driving them into the spotlight.
For many, “investing” in NFTs seems like a no-brainer. By learning how to do NFT trading, many young people see it as a means of escaping the 9 – 5 daily grind. As a result, the whole NFT marketplace is driven by small retail investors as opposed to commercial investment vehicles.
How are NFTs valued?
There are a number of factors affecting the price of an NFT. The first is its rarity; for example, works produced by celebrities or famous artists. Then we need to look at the NFT’s utility. By that we mean its real-world use. For instance, Coachella sells NFTs offering life-time tickets to its events, with the promise of front row seats.
Then we have the market value of the token. As its value increases, so does the market liquidity. The history of ownership can also affect the price. And finally, people take into consideration what the future price might be.
What’s the most expensive NFT?
A digital artist called Mike Winkelmann managed to sell a digital artwork, “The First 5,000 Days” for an eye-watering $69 million. The sale was through the traditional auction house of Christie’s and was purchased by the crypto billionaire, Vignesh Sundaresan, who goes by the nick-name of MetaKovan.
The Future of NFTs
The energy pushing the sales of NFTs appears to have lost momentum. Sales have fallen by over 92% since their heyday of September 2021. During this period there were 225,000 daily sales. Today they stand at just 19,000.
The first tweet from Jack Dorsey was sold for almost $3 million in March 2021. Yet less than a year later, the owner, who’s hoping for a $48 million payday with its resale, could only muster $6,222 after a twelve day auction. It is worth noting that the copyright of the tweet still belongs to Jack Dorsey.
This highlights a major problem with NFTs. And that is that they don’t fall under regular legal laws and jurisdictions when it comes to proof of ownership, authenticity or provenance. Also consider that the two factors driving the ever-increasing prices were perceived scarcity and increasing demand.
As for NFT betting, who knows what the future will bring. Some video games like “Counter-Strike: Global Offensive” feature a facility to place bets in order to win NFT skins. All the other ads for NFT betting sites inevitably lead to regular online casinos with not a single NFT in sight. In truth, dealing with NFTs represents a technical leap too far for the majority of gamblers.
Finally, we should mention that every time an NFT is “minted” (put on the Ethereum blockchain) it requires a staggering amount of energy. From minting to selling, an average single NFT uses around 340-Kilowatt-hours of energy. To put this in perspective, it is over a third of the typical usage for a US home in a month!
NFT Trading FAQs
NFT stands for “non-fungible token”. Being non-fungible, they’re not interchangeable as each has its own unique properties.
Absolutely! There are no age limits. Just as long as you can use a crypto wallet, you’re good to go.
They can’t be compared in this manner. One is a currency with each token having the same attributes and value. NFTs on the other hand, have a different type of value that it more than merely economic.
You can use a software wallet that utilizes a password and secure 12-24 word seed phrase. The second option is a cold storage hardware wallet. All the relevant security data for this is stored offline, making it that much more secure. Finally, there’s the InterPlanetary File System (IPFS) which stores your NFT offline while using pieces of data directly linked to your NFT.
Only as secure as the owner follows best practices. These involve creating complex credentials, seed phrases and keeping all your information private. It’s always best to keep all of this offline, to avoid any local computer hacks.
At the moment, NFTs are not on the rise. However, this might change in the future. Given that they’re quite volatile and rely on high demand, we suggest that you consider all the factors before you take the plunge.
The Punters Page Final Say
NFTs are a new technology that is searching for a purpose. Originally, they were billed as a means of helping digital artist. However, most of them cannot afford the “gas fees” to mint their art onto the blockchain. Since then, NFT has developed into other uses, and who is to say that NFT betting can’t become a thing in the future. For that to happen, however, the markets and the laws around it, especially related to copyright, have to be clearer.
For the moment you can simply enjoy other cryptocurrency markets, or simple sports betting, while keeping an eye on NFT markets to see if demand increases.