Non-fungible tokens (NFTs) are rapidly gaining popularity these days, with people paying large sums of money for these unique collectible cryptocurrency assets. In fact, one NFT created by the digital artist Beeple sold for an astounding $69 million in early 2021, while many others have fetched multimillion-dollar sales prices.

With the potential for such large sums of money, more people are creating NFTs in the hopes of cashing in on the current craze. Here’s a step-by-step guide on how to create (i.e. mint) and sell an NFT.

But how are NFTs different from cryptocurrencies?

While both are built on the blockchain, that is where the similarities end.

Cryptocurrency is a currency and is fungible, meaning that it is interchangeable. For example, if you hold one crypto-token, such as one Ethereum, the next Ethereum that you hold will also be of the same value. However, NFTs are non-fungible, meaning that the value of one NFT is not equal to another. Each piece of art is unique, making it non-fungible.

Non-Fungible Tokens: What the Funge Are They?

NFTs are unique digital assets that cannot be replaced. For example, the first-ever tweet sent by Twitter founder Jack Dorsey can be viewed by anyone with internet access, but with the advent of the Ethereum blockchain, actual ownership of those five words in their original tweet form became a real possibility.

In fact, it was purchased earlier this year for 1,630.58 ether, a cryptocurrency that was worth $2.9 million at the time of the transaction.

Unlike tangible assets such as an original Picasso or a LeBron James rookie card (which recently sold for $5.2 million), buyers of NFTs are essentially purchasing non-physical certificates of authenticity in code form that can never be changed.

Sure, anyone can hop online and see an image of that Beeple collage, have a laugh at the expense of Brian, or read the NYT piece by Kevin Roose, but only one person or entity can actually boast ownership of the unique characters (read: stored information) living on the Ethereum blockchain that represents the genesis of each creation being acquired.

While one bitcoin can be traded for another, leaving the owner with the very same thing (meaning a bitcoin is fungible), a one-off digital asset (such as the first Jack Dorsey tweet) is like a piece of art.

It can be copied or replicated, and even viewed by millions, but there will only ever be one original. To collectors, there’s considerable value in that, and the data NFTs contain can be used to prove ownership rights over these digital assets.

Why Use NFTs for Fundraising?

So why would a business choose to create an NFT for fundraising instead of joining a platform like Kickstarter? The primary difference is that the NFT sits on the blockchain, making everything transparent and trackable.

This allows the community to follow exactly where the money is coming from and where it’s going, giving them much more purchasing power than before.

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