Do you know about Non-Fungible Tokens or NFTs? Here is a detailed description of NFTs that will help you understand and use them better in your life.
What’s the latest trend you learned on the internet recently? Well, the internet these days is buzzing with so many eye-catching terms that it is hard to keep track of them all. However, NFTs or Non-Fungible Tokens are a hot topic of discussion these days and they have literally taken the digital world by storm.
But do you really know about Non-Fungible Tokens? Are they worth the hype they get across the globe? Let’s find this out in a simple, easy to understand language so that you can make the best use of NFTs or Non-Fungible Tokens:
Table of Contents
What are NFTs?
You must have heard about cryptocurrencies or Bitcoins. Well, Non-Fungible Tokens or NFTs are a similar digital form of currency that takes into account objects of the real world. They can be in the form of photos, videos, GIFs, music or game, etc. and they are all bought and sold over the internet.
Non-Fungible Tokens are created from digital objects that can be tangible or non-tangible. They can be in the form of:
- Photos and images (artworks)
- Video game skins and virtual incarnations
- Designer stamps etc.
But again, NFTs are not limited to these formats only. Jack Dorsey – the co-founder of Twitter received a whopping $2.9 million+ sum when he sold his first-ever tweet as an NFT.
NFTs are normally encoded with some software just like the cryptocurrencies and you cannot duplicate them.
Did you know that NFTs have been a part of the market since 2014 but hardly anyone knew about them? However, they started gaining popularity in 2017 and till now, people have spent a sum of over $175 million on Non-Fungible Tokens.
Why are NFTs so Popular?
NFTs are popular because they are generally one of a kind or very, very rare. Besides, if a normal image gets a lot of popularity on the internet, the original version of it could get very popular as an NFT.
But don’t you think that anyone could screenshot or reproduce an NFT very easily? So why are people ready to spend money worth millions of dollars on NFTs?
Well, even though you can reproduce the Mona Lisa painting a thousand times, the original thing holds a lot of value and this is just the case with Non-Fungible Tokens. NFTs allow the buyers to own the most original form of the popular item and it comes with a built-in authentication as well that denotes the ownership. So the original owners and buyers of the particular element have proof of the reality of the product.
How do NFTs Work?
Non-Fungible Tokens work on a blockchain process and this is a kind of public ledger that takes into account all the transactions. Even the cryptocurrencies work on blockchain process and to be more specific, Non-Fungible Tokens are normally held on Ethereum blockchain. However, other blockchains support NFTs as well.
While a Non-Fungible Token is sold, the owner does not get any physical object. It’s only a digital file, but they get exclusive ownership of the same and one Non-Fungible Token can have only one owner at a time.
What’s the Use of Non-Fungible Tokens?
NFTs or Non-Fungible Tokens are actually good things for content creators and artists who wish to get rewards for their creativity. If you are an artist who makes good paintings but does not get to feature in galleries and auction houses, Non-Fungible Token is a digital medium where you can monetize your creations.
The artists, musicians, painters, and even photographers, etc. do not have to rely on auction houses or galleries to get money for their work. They can put all of their work on the internet as NFTs and get handsomely rewarded. In this aspect, the creators can sell their arts directly to the consumers and there are no middlemen involved in the process.
Besides this, NFTs can help the artists get royalties as well. They can claim a certain percentage of money whenever their original work is sold to any new seller.
But as aforementioned, there is no specific format for Non-Fungible Tokens and anything new and interesting can serve as an NFT for the buyers. It depends on how unique is the product you wish to sell.
How to Buy NFTs?
If you wish to buy NFTs, you will need a few things as follows:
- A Digital Wallet: You need a digital wallet that helps you to store NFTs and other types of cryptocurrencies.
- Cryptocurrency: You need to purchase some cryptocurrency such as Bitcoin or Ether as well and this could be depending on the currencies that your NFT provider accepts.
You can buy cryptocurrencies using your Credit Card or platforms such as PayPal and Kraken etc. After you buy it, you will be able to move it to the wallet or your choice from the exchange.
Where to Buy NFTs?
Non-Fungible Tokens are available on NFT marketplaces and once you are ready with the all the requirements, you can opt to buy them at the most popular places such as:
- Foundation: This is a platform that mandates upvotes or invitations from creators for a new artist to post their art. It’s actually very popular among the artists.
- OpenSea: OpenSea is known to be the leader in NFT sales and has distinct digital assets on the platform to help the artists. It is free to sign up and you can browse the offerings for free as well.
- Rarible: Rarible is another popular marketplace for all kinds of NFTs and you can get videos, arts, collectibles, and other products on the platform.
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Are NFTs Worth Buying?
Well, this is the biggest question, and as per the experts, just because you can buy Non-Fungible Tokens, it does not mean you should buy them.
There are certain risks associated with NFTs relating to their uncertain future and they do not have a huge history as well to judge.
Besides, buying Non-Fungible Tokens can be a personal decision and if you think a piece of art holds some value for you and you have money to pay for it, you can go for an NFT.