{"id":20284,"date":"2022-11-09T10:21:25","date_gmt":"2022-11-09T10:21:25","guid":{"rendered":"https:\/\/zebpay.com\/in\/?p=20284"},"modified":"2022-11-09T11:03:12","modified_gmt":"2022-11-09T11:03:12","slug":"introduction-to-nfts","status":"publish","type":"post","link":"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts","title":{"rendered":"An Introduction to NFTs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#What_are_Non-Fungible_Tokens\" title=\"What are Non-Fungible Tokens?\">What are Non-Fungible Tokens?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#What_Makes_NFTs_So_Special\" title=\"What Makes NFTs So Special?\">What Makes NFTs So Special?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#How_Do_NFTs_Work\" title=\"How Do NFTs Work?\">How Do NFTs Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#How_are_Non-Fungible_Tokens_Used\" title=\"How are Non-Fungible Tokens Used?\">How are Non-Fungible Tokens Used?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#How_to_Buy_NFTs\" title=\"How to Buy NFTs?\">How to Buy NFTs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/zebpay.com\/in\/blog\/introduction-to-nfts\/#How_are_NFTs_Taxed\" title=\"How are NFTs Taxed?\">How are NFTs Taxed?<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>The growth of crypto has brought with it innovation in several other fields. One such field is digital art. Non-fungible tokens (NFTs) are hitting the headlines every day because of the unbelievable prices they sell for. For example, a collection called \u201cCryptoPunks\u201d sold for an average price of over $100,000.&nbsp;<\/p>\n\n\n\n<p>But what are NFTs? Art is not their only application. They have a wide range of uses from securing legal documents to proving ownership of other digital assets.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Non-Fungible_Tokens\"><\/span>What are Non-Fungible Tokens?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An NFT is like a certificate of ownership. They certify the ownership of digital assets and make them unique on the blockchain. Almost anything can be converted into an NFT, from the artwork mentioned above to music, videos and even in-game characters. An NFT is a token on a <a href=\"https:\/\/zebpay.com\/in\/blog\/what-is-blockchain-layer-0-1-2-and-3\" target=\"_blank\" rel=\"noreferrer noopener\">blockchain<\/a>, as this is what allows the network to track its ownership and transfer from one person to another.<\/p>\n\n\n\n<p>NFTs are non-fungible. This means no two NFTs are identical. Even if they might look the same, each has a unique token that proves its authenticity. It is not possible to replicate or replace this token.&nbsp;<\/p>\n\n\n\n<p>Unlike crypto tokens, NFTs cannot be divided into smaller parts. You may be able to send someone 0.1 Bitcoins, but an NFT is a distinct unit.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Makes_NFTs_So_Special\"><\/span>What Makes NFTs So Special?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When you buy an NFT like a Bored Ape, each one looks different from another in the collection. This is because all NFTs have some unique attributes or traits that determine their rarity. These attributes are also stored on the blockchain, along with information about their owners.&nbsp;<\/p>\n\n\n\n<p>The ease of establishing authenticity and their uniqueness is what makes an NFT valuable.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Do_NFTs_Work\"><\/span>How Do NFTs Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"384\" src=\"https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work-1024x384.jpg\" alt=\"How Do NFTs Work\" class=\"wp-image-20291\" srcset=\"https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work-1024x384.jpg 1024w, https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work-300x113.jpg 300w, https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work-768x288.jpg 768w, https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work-150x56.jpg 150w, https:\/\/zebpay.com\/in\/wp-content\/uploads\/2022\/11\/How-Does-NFTs-Work.jpg 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>NFTs use a blockchain as a public ledger. But unlike crypto tokens, they are not divisible into smaller parts. Each one is a single unit representing some digital or physical asset. The most widely used blockchain for NFTs is Ethereum. Crypto coins on Ethereum use the ERC-20 standard, while NFTs use ERC-721.&nbsp;<\/p>\n\n\n\n<p>Ownership is managed through two features, unique ID and metadata. These characteristics cannot be copied by any other token on the blockchain. When you create a new NFT, you execute a smart contract. This contract allows the new NFT to add itself to the network and gives it its unique attributes and transferability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_Non-Fungible_Tokens_Used\"><\/span>How are Non-Fungible Tokens Used?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Currently, the most popular avenue for NFTs is collectables. For example, digital artists may choose to convert their art into NFTs to ensure it is not stolen or misused by others on the internet. This has become a major avenue for smaller artists and gives them a brand-new platform to earn from their creations.&nbsp;<\/p>\n\n\n\n<p>Second, NFTs can also be in-game collectables. In a game like CryptoKitties, your goal is to collect, breed and sell your NFTs to other users on the marketplace. Through this, you can truly own the game assets you play with. Several other games like Otherside and NBA Top Shot follow a similar format.&nbsp;<\/p>\n\n\n\n<p>But that\u2019s not all. NFTs have so many other uses beyond games. They can be used for securing legal documents like land ownership. Music and movies can also be distributed in the form of NFTs, making it easier to prevent piracy. Finally, digital invoices and tickets can also take the form of NFTs.&nbsp;<\/p>\n\n\n\n<p>Read more: <a href=\"https:\/\/zebpay.com\/in\/blog\/complete-guide-to-nft-investing\" target=\"_blank\" rel=\"noreferrer noopener\">Hacks For Finding NFT Projects<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Buy_NFTs\"><\/span>How to Buy NFTs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are two main ways you can buy NFTs. First, the collection you wish to buy may have its own market, like Decentraland or CryptoKitties. In such cases, you can link your crypto wallet to the website and purchase directly from other users of the platform.&nbsp;<\/p>\n\n\n\n<p>Another avenue is buying them from one of many NFT marketplaces. Some of the most popular websites are OpenSea and Rarible. Once you link your wallet to any of these marketplaces, you can choose from thousands of collections. Every attribute and trait is listed along with the asking price.&nbsp;<\/p>\n\n\n\n<p>No matter where you buy from, the process is simple and seamless.&nbsp;<\/p>\n\n\n\n<p>Read more: <a href=\"https:\/\/zebpay.com\/in\/blog\/5-ways-to-protect-your-nfts-from-being-stolen\" target=\"_blank\" rel=\"noreferrer noopener\">5 ways to protect your NFTs from being stolen<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_NFTs_Taxed\"><\/span>How are NFTs Taxed?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the 2022 Union Budget, all gains from Virtual Digital Assets &#8211; including NFTs &#8211; are taxed at a flat 30%. This means that if you sell any of your NFTs, you will have to pay a 30% tax on any income received from the sale.&nbsp;<\/p>\n\n\n\n<p>However, the Central Board of Direct Taxes has specified that the following items will not be considered NFTs.<\/p>\n\n\n\n<ul>\n<li>Gift cards or vouchers<\/li>\n\n\n\n<li>Mileage points<\/li>\n\n\n\n<li>Subscriptions<\/li>\n<\/ul>\n\n\n\n<p>Additionally, if the sale of the NFT is accompanied by a transfer of an underlying tangible asset, that sale will be taxed as per the asset and not as an NFT.<\/p>\n\n\n\n<p>You can now buy 100+ Cryptos on <a href=\"https:\/\/zebpay.com\/in\" target=\"_blank\" rel=\"noreferrer noopener\">ZebPay<\/a> India. ZebPay also lists <a href=\"https:\/\/zebpay.com\/in\/markets\/btc\" target=\"_blank\" rel=\"noreferrer noopener\">Ether<\/a> which is the token for the Ethereum Blockchain that runs most NFTs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The growth of crypto has brought with it innovation in several other fields. One such field is digital art. Non-fungible tokens (NFTs) are hitting the headlines every day because of the unbelievable prices they sell for. For example, a collection called \u201cCryptoPunks\u201d sold for an average price of over $100,000.&nbsp; But what are NFTs? Art [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":20287,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[14],"tags":[143],"acf":[],"_links":{"self":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts\/20284"}],"collection":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/comments?post=20284"}],"version-history":[{"count":0,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts\/20284\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/media\/20287"}],"wp:attachment":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/media?parent=20284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/categories?post=20284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/tags?post=20284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}