Five questions and answers let you understand NFT in simple terms
Foreword:
Foreword:
This article summarizes five questions that the general public may be curious about, including the specific concept of NFT, degree of acceptance, transaction method, handling fee, and production method. (This article has a total of 3243 words, and the reading time is about 7 minutes)
NFT has become more and more popular recently, and it seems to have become the new darling of the cryptocurrency industry, but many people do not know about NFT. Therefore, we have summarized 5 questions about the specific concept, transaction method, and production method of NFT that the general public may be curious about. , and analyzed from the perspective of the hottest Korean market for NFT.
NFT is the abbreviation of "Non Fungible Token". As one of the blockchain-based virtual assets, NFT is also called"non-homogeneous token"non-homogeneous token". NFT can be traded completely on the exchange. Although cryptocurrencies such as Bitcoin are also called tokens and can also be traded, why is only NFT used?"Non-homogenization
What about the wording?
If you look closely, you can see that traditional cryptocurrencies and NFTs are different. Bitcoin has 21 million identical tokens, in contrast, each NFT is unique. To sum up, it is easy to understand NFT as a "digital certificate of authenticity" that exists in this world, that is, a "collection" with its own identification label.
If the NFT is rarer (quantity, style, etc.), the price may also be higher. For example, the Beeple NFT work "Every Day: The First 5,000 Days", which currently sells the highest NFT price, was finally hammered down for US$60.25 million, plus a commission of about US$69.3 million (about 450 million yuan).
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▶2. To what extent is NFT recognized? At the end of July 2021, Ground X, a subsidiary of Kakao’s blockchain technology, stated that it will sell the NFT work “Crivasse #01. 100 KLAY per piece (about 110,000 won, 1 KLAY is about 1,100 won, KLAY is a cryptocurrency developed by Kakao), although each person can only buy one piece, 999 works were still sold out within 30 minutes of the launch , with a total sales volume of more than 109.89 million won (about 1.2 million yuan).
image description"Mr. Misang"Digital Art Writers Sold by Klip Drops"Crevasse #01. by Mr Misang"
On August 1st, actor Ha Jung-woo's first digital art work "The Story of Marti Palace Hotel" started bidding at 27,000 KLAY (approximately 29.7 million won). Different from the previous oil painting works, animation and sound effects were added to this work. The NFT work was finally sold for 47,000 KLAY (approximately 57 million won).
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"The Story of Marti Palace Hotel" by Korean actor and painter Ha Jung-woo"In foreign countries, there are more special NFT transaction cases. The job resume written by Apple founder Steve Jobs in his 20s, and the first tweet of Twitter founder Jack Dorsey were also made into NFT for sale. In general, NFTs can be thought of as digital artwork or images. However, in the digital world, as long as you can insert blockchain addresses such as videos and audio sources, anything can be made"digital original
. Junseon Eo, CEO of Korean exchange CoinPlug, said: "NFT can be applied to any form of creative works and copyrights. NFT can even be used to create abstract concepts such as "meaningful records of major events or moments." However, to launch For more different types of NFT, the industry still needs to work hard in many ways.”
▶3. How do NFT transactions work?
As NFT has attracted attention as a new virtual asset, its trading methods have also attracted attention. No matter how valuable an asset is, if it cannot be traded, it has no value as an investment asset. Therefore, for those who want to own NFTs for investment rather than simple collection, the transaction method is very important.
auction"auction"and"and"fixed price sale
form. The form of the auction is that after the work is put on the shelves, the bidding starts at the lowest price, and those who want to buy it increase the price. This method is usually used when an NFT is issued. Ownership of the NFT will go to the highest bidder within the deadline.
A fixed-price sale differs from an auction in that a seller sets a price in advance to sell. This transaction method is mainly used when a large number of NFT works are generated.
Transactions are mainly paid in the cryptocurrency Ethereum, because NFT itself is a technology based on the Ethereum blockchain. The process of converting a digital file such as a JPG into an "NFT" is called "minting" and uses Ethereum technology."NFTing"Domestically, trading platforms are just getting started. April 2021, Korea's first NFT exchange
established. Since then, large companies such as Ground X (Klip Drops), Upbit (Lambda 256), and CoinPlug (METApie) have gradually entered the NFT industry. However, in addition to NFTing, the platforms built by these large enterprises have just entered the testing service stage. Korean companies use their own tokens and Ethereum for transactions. While Ethereum is designated as the default token, the platforms have established a system so that payments can be made using South Korean domestic tokens. For example, NFTing and Klip Drops use KLAY issued by Kakao, and Mintable supports META issued by the parent company Coinplug.
▶4. How are taxes and handling fees calculated?
followed by"Transaction Fees"Transaction Fees
, which is a royalty payment to the platform that supports the transaction. The fee collection rate is different for each exchange. OpenSea, the world's largest NFT exchange, charges a 2.5% sales fee. If the NFT you own is sold for 100 ETH, the seller will get 97.5 ETH and OpenSea will charge 2.5 ETH.
Finally, there is an additional handling fee set by the creator, which is the amount set by the person who made the NFT for the first time. Whenever a work is traded, a commission is paid to the creator.
For example, suppose a producer named A uploads a piece of work to OpenSea and sets a 2.5% handling fee. If the work is resold at 100 ETH, the seller gets 95 ETH, producer A gets 2.5 ETH, and OpenSea gets 2.5 ETH."still"still"artwork"artwork". If it is classified as a virtual asset, the "Act on the Reporting and Utilization of Specified Financial Transaction Information (Special Gold Act)" will apply. However, if it is classified as a work of art, the situation is different. No tax is charged if it is a work of a living Korean artist. Whereas, works by foreign or deceased artists will be classified as"Other income
, and the rest after deducting 60 million won will be taxed at 20%.
▶5. Can I also make NFT?"One of the biggest advantages of NFT is"anyone can make", anyone can easily create and sell their own NFT. If you want to make NFT on foreign websites, you can use platforms such as OpenSea, Rarible, and if you want to make NFT on domestic platforms in Korea, you can use Korean platforms such as NFTing. The production method is very simple. For example, to make an NFT on NFTing, you need to prepare"NFTization", and need to pay a certain amount of Ethereum or KLAY as minting fee. After logging in to the platform website, click", it will appear"make"screen, after uploading the NFT file, press"make"make
Next, select the generation method, which is divided into"Single"and"Multiple"and"Royalty". The former, as the name suggests, only generates one NFT work, while the latter generates multiple works. NFTs produced in the form of Single will be auctioned, and works in the form of Multiple will be sold at the price set by the creator. Finally, you will be asked whether to add
However, it will be very difficult if a file is randomly selected for production, and it is especially necessary to clarify copyright issues. If you upload a file that you do not have copyright, the NFT file is likely to be deleted without any notice in the future. It is recommended to check whether there are legal disputes such as copyright before creating an NFT file.
Conclusion:
Conclusion:
NFT is entering various industries at a rapid pace. Many people think that NFT is an area that is difficult to touch, but through this article you can learn that the casting and sales of NFT can be done by anyone. As more and more people start to pay attention to NFT, I believe that the NFT industry will flourish in the future!
