Although the non-fungible tokens or NFTs have existed since 2014, it was not until 2021 that they were able to attract mass attention. Last year, digital artist Mike Winkelman sold his NFT “The First 5,000 Days” for an impressive 69 million dollars. An event that marked a new era in the development of the NFTs and led to a huge jump in the price of these assets.
Some well-known investors and entrepreneurs, such as Gary Vee, believe that non-fungible tokens are the future and even create their NFT projects. Many celebrities have also ridden the wave of this trend, successfully selling their works for a significant amount of money. Of course, some sceptics see in them another bubble and predict their recent collapse. Only time will tell what the future of NFTs is, but at the moment it is a technology that has significant potential for development.
Therefore, in this article, we will pay more attention to what exactly is NFT, where they are used and what makes them so innovative. If you decide you want to own NFT, in the following lines you will find some useful tips related to the purchase of these assets.
What is NFT?
You probably hear a lot of people talking about NFTs or come across videos and articles about them in the media. But what exactly are they? Simply, NFT is an abbreviation of “non-fungible token”.
In short, non-fungible tokens are unique digital assets built on blockchain technology, on which cryptocurrencies are based. However, they are quite different from the familiar Bitcoin, Ethereum and other cryptocurrencies.
The main difference lies in their fungibility. Cryptocurrencies, as well as standard currencies – dollar, euro, etc., are fungible and can be divided into smaller parts, retaining the same value. For example, a € 20 banknote is fungible. It has the same value as any other € 20 banknote and can also be divided into two € 10 banknotes or four € 5 banknotes.
However, try to divide the popular painting of van Gogh Starry Night into parts. You can’t do without affecting its value. Even if you make an exact copy, it will not be authentic and again it will not have the same value. This famous picture is an example of an asset that is non-fungible.
Like Starry Night, NFTs are non-fungible. They are digital assets that cannot be exchanged for other NFTs, which makes them unique. non-fungible tokens allow us to create a digital certificate that is a unique asset. Also, you can attach them to almost anything, including a photo, video, song, or even tweet.
Thanks to this technology, we can create evidence of the authenticity of digital content that can be owned, bought, sold and marketed. Because these tokens are stored in an open blockchain, their embedded metadata and transaction history are accessible and can be checked by anyone in the world, as long as they have the Internet. In this way, NFT and its blockchain technology replace the need for certificates of ownership.
Where do non-fungible tokens find applications?
They create many benefits for digital content creators who choose to take advantage of this technology. First of all, the ability to prove ownership of the original asset. Second, by allowing them to sell their art directly, without intermediaries such as art galleries or auction houses, for example. NFTs offer the opportunity for artists to receive a certain percentage each time the asset is resold without having to take any action to that end.
NFT finds and will continue to find application in many different industries beyond art. For example, they are gaining popularity in the gaming industry. Unique characters, skins and other elements (weapons, equipment) are now available in the form of NFT. They give game developers another way to expand their brand and create additional revenue streams, while giving gamers a greater incentive to continue playing a game if they already have characters or elements in it.
We cannot miss their applications in the Metaverse, which is being talked about more and more often. NFTs are an excellent tool for verifying digital ownership, which can be helpful if one day all people own is digital land, housing or clothing for their avatar.
How can you buy NFTs?
In case you also want to join this trend and buy NFTs, there are a few things you need to know in advance. First of all, buying such an asset traditionally requires you to have a cryptocurrency, as well as a digital wallet in which to store them. Different NFT platforms work with different types of cryptocurrencies – this is another thing to consider. If you do not have a cryptocurrency, you can get one in one of the popular crypto platforms such as Binance, Coinbase, Kraken and others.
There are quite a few places where you can buy your first NFT, and as you read this article, more new platforms are likely to emerge. Therefore, I recommend that you carefully read the terms of each platform before making a purchase. Among the largest and most popular platforms at the moment are OpenSea.io, Rarible, Foundation and others.
I hope this article has given you useful information on what exactly are non-fungible tokens and how you can get them. If you are also interested in interesting topics related to entrepreneurship, business, marketing and personal finance, check out the other articles in my blog.