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Digital Collectibles: Everything You Need to Know About NFTs on Instagram

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October 12, 2022
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    On August 4, 2022, Instagram released a blog post stating the expansion of Instagram NFTs to around 100 countries in the Americas, Africa, the Middle East, and Asia-Pacific. Initially, this feature was only open to selected creators in the US back in May 2022. But after the initial testing phase and feedback, Instagram has finally introduced NFT displays.

    So, what happens when a centralized platform like Instagram, introduces the display of decentralized tokens like NFTs? Yes, you guessed it right! It creates waves of curiosity.

    This blog will debunk assumptions you might have about Instagram NFTs and answer to key questions. And for those of you who are new to the crypto world, here’s a quick recap on NFTs.

    What Do You Mean By NFTs?

    Non-fungible tokens or NFTs are blockchain-based digital assets held on the blockchain. They are unique items with particular metadata attached and can range from anything digital — from music to artwork, sports highlights to in-game objects, and even tweets!

    However, what really sets them apart is that, unlike fungible objects, these tokens are assigned a unique electronic signature that makes them irreplaceable.

    As a result of the inconvertibility of NFTs, they cannot be used for commercial transactions. And this is the exact reason why NFTs have been gaining significant popularity in recent years. Additionally, more and more platforms are willing to leverage the value of NFTs — and Meta has not been an exception.

    Appearing at the South by Southwest (SXSW) conference in March 2022, Mark Zuckerberg hinted at introducing NFTs into Instagram anytime soon, during the “Into the Metaverse: Creators, Commerce, and Connection” session. However, the official statement announcing the arrival of NFTs on Instagram was released later, in May 2022. 

    Instagram NFTs Features

    In the same month, Instagram tested its new NFT features with a select set of U.S.-based creators who were able to share their digital collectibles right on the platform. Creators and collectors involved in this initial testing phase included:

    … and many more!

    The rollout started with a very small group so as to learn more about the creators, users, and collectors. And the feedback paved the way for Instagram to improve the NFT experience for users.

    But what’s in it for “creators”?

    Adam Mosseri mentions in one of his tweets, the importance of the creator economy for digital platforms and talks about one of their major challenges to monetizing “doing what they love.”

    Adam Mosseri tweet:

    He adds that NFTs or digital collectibles are now gaining traction — and Instagram is joining the NFT bandwagon. Creators and people can share NFTs that they’ve either made themselves or showcase the ones they’ve bought “either in Feed or in Stories or in messaging”.

    Mosseri further argues that this initial test will help understand the difference between Instagram’s centralization and NFTs’ decentralization from a user’s perspective. As a result of this, he states that Instagram will now focus more on “distributed trust and distributed power”.

    Features of Instagram NFTs 

    When you post an NFT on Instagram, you might notice certain edits/changes, such as:

    • You’d see the NFTs tagged as ‘digital collectibles’. Upon clicking the tag, it reveals the details about the NFT creator and the owner are revealed.
    • The account will have a tab added next to feed, reels, and tagged photos in the shape of a hexagon with a tick, that’ll have all your digital collectibles.

    Here are some of the other notable features of Instagram NFTs:

    Connecting Digital Wallet

    The testing phase of Instagram NFT began with the support of only two major cryptocurrency payment platforms — Ethereum and Polygon. As of now, there has been a recent update of integration support with Dapper, Coinbase Wallet, and Flow as well.

    The creators and collectors of NFTs can also link their Trust Wallet, MetaMask, and Rainbow accounts to authenticate the ownership of their NFTs. 

    Auto-Tagging Creator & Collector

    Each of the NFTs that will be posted will auto-tag the NFT creator and the NFT collector. 

    Posting Digital Collectibles 

    One of the changes that really stands out is the unique ‘shimmer’ effect NFTs will have, setting them apart from the otherwise regular post on Instagram and the already existing features.

    Safety and Cost of NFTs on Instagram

    In a blog post, Instagram mentioned how important it is for them to reduce the entry barrier for Instagram NFTs. But in order to ensure the safety of the platform and its users, a number of issues have been taken into consideration:

    • The Instagram NFT space focuses on inclusivity and diversifying across various artists to help them monetize their work
    • The ability to report NFTs that go against the Instagram community guidelines
    • Lastly, but most importantly Meta promises to minimize the potential environmental effect of Instagram NFTs by investing in sustainable or renewable energy.

    With these, Instagram is not only taking care of community safety and inclusivity but is also protecting the environment.

    There will not be any fee involved in sharing or posting an NFT or digital collectible on the platform. Moreover, it has been mentioned by Adam Mosseri that the entire idea behind Instagram NFTs was to help creators generate money.

    Could this be a pointer to the fact that Instagram would enable users to buy and sell, and even mint NFTs in the future? Only time will tell.

    Bonus Question: What is #NFTeachMe?

    Instagram @creators launched the #NFTeachMe series in an effort to democratize access to NFTs and educate a wider audience.

    Bottom Line

    People are attracted to cryptocurrency and Instagram is no exception.

    The impact associated with the introduction of NFTs on Instagram is much deeper than offering access to an innovative space for the display of digital collectibles.

    Meta’s expansion reflects its efforts to increase access to web3 technology. And this is the foundation for Meta to eventually incorporate the exchange of digital products into its services in a manner consistent with existing market usage patterns.

    If you trade or invest in NFTs or other crypto assets, ZenLedger can help you easily calculate your NFT taxes, and also find opportunities for you to save money and trade smarter with our portfolio tracker. Get started for free now or learn more about our tax professional prepared plans!

    Instagram NFTs - FAQs

    1) What is a smart contract?

    Smart contracts are self-executing contracts that are stored on a blockchain. These are often encoded directly into lines of code and used to streamline the execution of contracts between buyers and sellers. Blockchains with smart contracts installed make transactions traceable, transparent, and irrevocable.

    2) What do NFTs stand for?

    NFTs stand for non-fungible tokens.

    3) What are the best NFT collections?

    Some of the most popular NFT collections are
  1. Bored Ape Yacht Club
  2. SuperRare
  3. Loaded Lions
  4. AMR21
  5. Battle Infinity, among many others
  6. 4) How do you mint an NFT?

    Minting an NFT means publishing a digital asset on the blockchain. After an NFT has been minted, it can be sold, bought, and traded. In order to mint an NFT on platforms such as OpenSea, you have to first connect your wallet, then tap on “Create”, and simply fill out the required fields.

    5) Where can creators sell NFTs?

    Given the increasing popularity of NFTs, a number of NFT marketplaces have made it easier for creators to sell NFTs. Some of the major NFT marketplaces are:
  7. OpenSea
  8. Rarible
  9. SuperRare
  10. KnownOrigin
  11. 6) How much tax do you pay on NFT?

    It is worth mentioning that creating NFTs does not incur taxes. However, what is taxable is buying NFTs with cryptocurrency, trading one NFT for another, and also selling an NFT for cryptocurrency. You can find everything that you need to know about NFT taxes in our NFT tax guide.

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