The NFTs or Non-Fungible Tokens have recently grown in prominence as digital assets that have caught artists and celebrity’s attention and made millions of dollars in sales.
2021 seems to be the year that NFTs have exploded in popularity, which may be due to the covid19 pandemic effects that have left many people wanting to invest more to prepare for the future.
Are NFTs worth it, or is it hype? Experts predict that NFTs are here to stay, and they will change the investing life forever. Watch this space!
What is an NFT?
NFT is a digital asset that represents objects like music, art, videos, etc. NFTs are bought and sold in the online market with cryptocurrency. They are encoded with the same software like different cryptos.
NFTs have been around since 2014; however, they are just gaining popularity now because it is an easy way to buy and sell digital artwork.
But what makes it different? An NFT allows the buyer to own the original item! The actual item contains a built-in authentication serving as proof of ownership that no two people can have. This eliminates the risk of buying copy cuts or fakes. Collectors value those ownership rights more than the item itself, so many are willing to go the extra mile to own it.
How does an NFT work?
You might be familiar with blockchain or cryptocurrencies. NFTs exist on the blockchain too, and are distributed in a public ledger like Ethereum that records all transactions.
An NFT is created both from tangible and intangible items that include:
- Art
- Music
- Collectibles
- GIFs
- Videos
- Sports highlights
- Video game skins
- Virtual avatars
- Designer sneakers
- Tweets
Overall, NFTs are like the physical collector’s items, only that they are digital. Therefore, instead of getting an actual art to hang on your wall, the buyer receives a digital file. The most significant advantage is that these digital files cannot be stolen or damaged, unlike the physical ones.
These tokens also get exclusive ownership rights – they can only be owned by one owner at a time. They have unique data that makes it easy to verify the owner and can be transferrable to those who buy them. The owner also gets a chance to store unique information inside them like a signature.
How are NFTs different from Crypto?
NFTs and cryptocurrency are built on the same programs, but they are not the same thing. Cryptos are fungible – meaning they can be exchanged or traded for one another.
However, the NFTs are different; they each carry a digital signature that makes each unique from another. NFTs can’t be exchanged for another – non-fungible.
In short, Bitcoin is always equal to another, but an NFT is unique and like no other.
Popular NFT Marketplaces
If you are ready with our NFT wallet, you are prepared to trade, and there is no shortage of NFY marketplaces. Currently, the most significant marketplaces include
As you trade – whether buying or selling your NFTs, be sure to exercise caution in these marketplaces and others. The online market is one of the most accessible markets to have all sorts of fraud happening. Be careful not to fall prey to impersonators!
