If you have not heard about what is an NFT, then you have been living under a rock. They have imploded in the investing market this year, from expensive NFT art and music to food and even toilet paper. All these digital assets are selling like hot cakes for a few million dollars.
But the main question is, are the NFTs worth all the hype and money? Some people believe NFTs are one-time wonders, but others think they’re here to stay. They are going to change the investment industry forever.
But wait…
Let’s take a step back and first know what is an NFT. And what is NFT meaning?
What Are NFTs?
NFTs or Non-Fungible Tokens are digital assets that can be represented as real-world assets. They can be NFT art, music, videos, or even in-game items. Just like cryptocurrency, these are also bought and sold on an online mode only. They are even encoded on a similar software as cryptocurrency.
They have been since 2014, but now they are gaining popularity due to the increase in buying and selling. About $174 million was spent on NFT in November of 2017 alone. NFTs are generally one-of-a-kind or limited access with unique codes.
This makes NFTs stand out from any other digital assets or creations. Ideally, if we limit the
supply, it would, in turn, increase the value of that asset due to high demand.
In the earlier days, NFTs were digital creations that already existed on the internet. Like an iconic clip from the NFL or a unique picture of famous artwork.
For example, famous digital artist, Mike Winklemann, famously known as “Beeple,” composed a digital artwork of 5000 daily drawings. This effort was to create the most expensive NFT, as well as famous. The “EVERYDAYS: The First 5000 Days” was sold for $69.3 million at Christie.
How Does NFTs Differ From Cryptocurrencies?
The only similarity between cryptocurrencies and NFTs is that they are built using a similar programming code. And that’s it; there is no other similarity between the two.
Cryptocurrencies and physical money are both “fungible,” which means they can be exchanged or even traded with each other. They are both equal in value as well. As one dollar is similar to another, it goes the same for bitcoin.
The fungible property of crypto makes it a trusted mode of carrying out blockchain transactions.
But what is an NFT? NFTs are pretty different. Each NFT digital signature is different and unique, making it impossible to trade or exchange with one another. Hence, it is Non-Fungible.
For example, An clip of NFL is not as equal as the EVERYDAYS, even though they are both NFTs. Even two clips of NFL are different from each other and cannot be traded or exchanged.
How Does NFTs Work?
NFTs has its presence on the blockchain. It is a distributed public ledger that records all transactions. You should be pretty familiar with blockchains as they are what makes cryptocurrency possible.
NFTs are generally on the Ethereum blockchain, even though other blockchains also support it.
Now the question stands, how to create an NFT? They are made rather than minted from digital objects, which are both tangible or intangible. They are,
- Art
- GIFs
- Videos and sports highlights
- Collectibles
- Virtual avatars and video game
- Designer shoes
- Music
Even tweets are counted as NFTs. Jack Dorsey, the co-founder of Twitter, sold his first tweet as NFT for $2.9 million or more.
NFTs are essentially like collectible objects but only in online mode. So it’s like buying a painting you can hold. You instead buy the digital file that contains the artwork.
But there is an advantage for any NFT. Here can only be one owner at a particular time. Through NFT’s unique data system, it makes it easier to verify the ownership, which makes the transfer of tokens among owners even easier.
What Are NFTs Used In?
NFTs or blockchain technology provides an amazing opportunity for the artists or the various content creators. They can gain a different way to gain monetarily through their work. For artists, they don’t have to depend upon art shows or galleries to sell art anymore.
They can directly connect with customers as NFTs. If they enable the royalties program, they will get a percent of the sales each time it resells. Usually, after an art piece or painting is sold, the artist doesn’t receive a rate from the resells.
One of the most significant NFT sales over the years is Nyan Cat, GIF, which sold for $600,000 in February. The NBA Top-Shot sold for $500 million in March. And also, a single Highlight of LeBron James in NFT got $200,000.
Worldwide celebrities such as Snoop Dogg, Amitabh Bachchan, Lindsay Lohan, and even Salman Khan got into the NFT parade. They are known to sell memories, art, or moments that are valuable through NFTs.
How To Buy NFTs?
Now that we know how to make an NFT, let’s understand how to start your NFT collection. You should prepare a few things and get a digital wallet to store the NFTs and crypto. You can buy cryptocurrencies like Ether through your a NFT user.
You are able to buy bitcoins using credit cards on different platforms like Coinbase, eToro, Kraken, and Paypal. You can quickly move the exchange in your digital wallet.
Few Of The Popular NFT Marketplaces
Once all your set up is complete, now all you need to do is shop from different NFT marketplaces.Now that we know what is an NFT, let’s know the marketplaces where you can buy and sell NFTs. There are no shortage of NFT marketplaces for you to buy from. A few of them are,
- OpenSea.io
This peer to peer platform has rare collectibles of digital items. You need to create an account for the browser for NFT collections. Here you can sort out the sales volumes of new artists.
- Rarible
Rarible is a democratic open market where you can sell and buy collectibles as NFTs. These RARI tokens can be issued on the platforms to weigh as features like fees and community rules.
- Foundation
In this platform, the artists are able to “upvote” and even invite your fellow artists as well. These communities are very exclusive and has an entry cost. The Nyan cat was sold here on this platform.
Frequently Asked Questions (FAQs):
NFTs are individual tokens with valuable information that is stored in them. NFTs are an unique data that makes it easier to verify and validate the ownership and to transfer among owners.
NFTs have the ability to assign and to claim ownership of any unique piece of the digital data. It is trackable through Ethereum’s blockchain that works as a public ledger.
NFTs has the value as the buyer and the community believes that it has high value. These are like art and other collectibles. An NFT gains more monetarily, from the person who owns it.
Wrapping Up!
Thanks to the, “What is an NFT?” guide, now we have a clear information about what is an NFT. Even how to create an NFT and even how to use it, and even how to buy it.
Now that you know, the differences between NFTs and other cryptocurrencies. And the knowledge of blockchain. NFTs are going to be the future of investments.
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