What is NFT
NFT stands for non-fungible token. NFT can be any digital asset such as creative artwork, drawings, music, video, or even a tweet. It is powered by the same blockchain technology that built cryptocurrencies such as Bitcoin or Ethereum.
Cryptocurrency is fungible, which means that you can trade one Bitcoin for another Bitcoin and you will get exactly the same thing. Unlike cryptocurrency, each NFT is unique and non-fungible.
The rationale behind NFT
You can think of NFT as a digital version of fine art and NFT marketplace as an online fine art gallery.
Just like how contemporary artists want to get recognised and showcase their fine arts for sale in an exhibition, the same goes for the little-known creators of the GIFs, emoticons, or animations you see every day.
Similarly, just like how the ultra-rich fine art collectors see value in the fine arts they buy, NFT collectors can invest in the digital arts they want or just simply support the artists for a good cause.
Understanding the risks of NFT
Similar to cryptocurrency, the same blockchain technology that powers NFT keeps track of your ownership of the digital asset.
However, like every investment, there are significant risks. There is always upside potential, as well as downside potential where you could lose all your investment.
In a fine art gallery or auction houses such as Sotheby’s or Christie’s, there are experts capable of performing professional valuation to ensure fair and consistent valuations for all the art pieces. On the other hand, there isn’t such a mechanism in the NFT marketplace yet. You will need to be prepared for huge volatility in the NFT marketplace.
Moreover, when it comes to liquidity, you can imagine that it will take time to find another seller interested in the art pieces you own.
How and where to buy NFT in Singapore
As NFT is powered by blockchain technology (mostly Ethereum for now), you will need an Ethereum wallet and purchase some Ether.
Then, you can head over to some popular NFT marketplaces to hunt for the arts you want to collect. Do keep in mind that these marketplaces usually charge a fee for each transaction and each marketplace has different fee structures.
The more popular NFT marketplaces are:
How and where to sell NFT in Singapore
You must first create artwork that will attract buyers. Try going through OpenSea and sort the art pieces by sales volume to get an idea of what buyers want.
Once you have your artwork ready, you will need to decide where to sell them. As a start, you can try OpenSea or Rarible. There’s no barrier to entry for these two platforms and any seller can list their artworks there.
Foundation works very differently from OpenSea and Rarible. You must receive upvotes from the Foundation community or get an invitation from the existing creators on Foundation before you can list your artworks to sell.
Top image via Pixabay