NFTs have skyrocketed in popularity over the last year, owing primarily to the increasing amount of non-fungible token use cases in many sectors, ranging from collectible art to gaming. With their increasing popularity, should you consider whether or not you should give NFTs as a gift?
According to Google Trends, NFTs began to pick up in February of last year and exploded when related NFT sales took off. Dapper Labs’ sales and resales of those NFTs have already surpassed $780 million. In March, an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. NFT revenues totaled $1.2 billion in the first quarter, $1.3 billion in the second quarter, and a stunning $10.7 billion in the third quarter, thanks to the success of games like Axie Infinity, and the increasing interest in owning NFTs amongst investors.
With its growing popularity, many individuals are considering giving NFTs as gifts to friends, families and business partners. But what precisely are NFTs? Should you give NFTs as a gift for your loved ones? If so, how do you go about it?
What Are NFTs?
NFTs (non-fungible tokens) are blockchain-based digital collectibles. They could be anything from digital art, to in-game items, to music, or digital sports trading cards. An NFT is a digital asset that symbolizes real-world items such as art, music, in-game items, or videos, amongst others. NFTs are tokens that are used to indicate ownership of one-of-a-kind goods. They allow us to tokenize items like collectibles, art, and even real estate. The growing non-fungible tokens use cases are taking almost all digital industries by storm. Their growth has defied most cryptocurrency news predictions, as many anticipated NFTs to be a bubble that would burst, but it has yet to do so.
NFTs are purchased and traded online, usually using cryptocurrency or prepaid digital token cards, and are typically encoded with the same underlying software as many cryptocurrencies. Despite the fact that they have been around since 2014, NFTs are gaining popularity as a popular means to buy and sell digital artwork in the 2020s. According to The Guardian, collectors and dealers spent a stunning $22 billion on NFTs in 2021, up from $100 million in 2020. NFTs are one-of-a-kind objects, with each variation generally being part of a very limited run, with unique identification codes. “Essentially, NFTs create digital scarcity,” explains Arry Yu, managing director of Yellow Umbrella Ventures and head of the Washington Technology Industry Association Cascadia Blockchain Council.
New Gold for Investors and Art Collector: NFT Art
It is still debated if NFT art is an obsession for those who classify as Gen Z, but we are seeing an increasing number of Gen Z NFT art artists worldwide who have been quick to grasp the new technology and even faster to commercialize their artworks via blockchain. This was even before many young institutional investors grasped the worth of NFTs and the importance of investing in the metaverse. First and foremost, NFT art is art, and an investment second. If you value the creator’s vision as represented in a piece and find beauty in it, then it has aesthetic worth for your collection. Moreover, unlike conventional art, which is generally seen in galleries, museums, and auction houses — or on their websites — NFT art is more accessible and transferable.. Therefore, if you enjoy art and want to invest in the future of the metaverse, cryptocurrency, and possibly the internet itself, then NFTs are an excellent alternative for your investment and art collection. This also makes them a highly unusual and timely gift for anyone’s NFT-loving friends and family.
How to Gift an NFT
The most important thing you’ll need to buy and gift NFTs is a digital wallet- this is a software that allows you to keep your assets online. At a basic level, you can sign- up on a crypto exchange site like Rarible or OpenSea and have your digital wallet set up. NFTs are time-stamped in a unique way, and they record the event and time of transfer by capturing it in data which is then stored on the Blockchain. To start gifting NFTs to your pals and loved ones, you need to select a marketplace that has the necessary gas fee established. This is because many NFTs are created on the Ethereum (ETH) network, which has hefty gas prices. The following steps will guide in gifting NFTs:
- Create an account with platforms like Rarible, OpenSea, Nifty Gateway, and Mintable, and find the NFT you wish to purchase and open.Here you are presented with a huge collection of NFTs to choose from.
- Buy the cryptocurrency the NFT platform is trading in so you can pay for gas fees. Most of the biggest cryptocurrency exchanges use Ethereum and make it simple to deposit fiat currencies, such as US dollars.
- Create a crypto wallet with such platforms as Metamask or Trustwallet. There are other external crypto wallets available, but Metamask and Trustwallet are the most popular. Then you can link the wallet to the NFT platform and purchase the NFT of your choosing.
- Send the NFT to a loved one or a group of friends. You may need to ask for their wallet address, which will be either a long string of letters and numbers or a QR code. If they don’t have a wallet, you may have to make one for them.
Digital Wallets Advantages and Disadvantages in Gifting NFTs
The NFT ecosystem is predicated on the high level of security provided by blockchain technology. As a result, with over 66.5 percent preference, non-custodial wallets and exchanges are growing increasingly popular among crypto holders. As the need for larger NFT markets grows, more crypto platforms are creating decentralized applications to address the demand for highly secure NFT platforms. As a result, in the near future, non-custodial platforms may completely dominate the crypto sector.
Make sure to enter the recipient’s wallet address accurately while sending an NFT to their address. Also, note that transferring NFTs is a blockchain transaction, and it is irrevocable and includes gas fees.
The expanding use cases of NFTs has made it appealing to people to give NFTs as gifts. The procedure of initiating an NFT transfer to others as a gift is typically pretty straightforward. With the relevant wallet address, the NFT to gift, and enough crypto to cover the gas fees, you are good to go. In general the process of giving an NFT as a gift entails opening an account with the NFT marketplace, funding the account from a crypto wallet, identifying the NFT, selecting the option to transfer it, and then entering the recipient’s wallet address.
Now that you know how to do so, start giving NFTs as a gift right now and invest in the exciting new world of non-fungible tokens.
Featured Image: Megapixl