Rumbles in the blockchain over the last couple of years have turned into tidal waves of stories about the latest crypto-related craze: NFTs.
In early 2021, a ten-second video of pedestrians passing Donald Trump in the street made by an artist called Beeple sold for over $6 million. This was one of the highest recorded sales of an NFT yet and Beeple would quickly go on to become one of the most valuable living artists.
NFTs are non-fungible tokens and they’re currently taking the internet and art world by storm. But what exactly are they and what do you need to know about them?
In this NFT guide, we’ll shed some light on this emerging technology.
What Are NFTs?
A non-fungible token is a unit of data that is stored on a type of digital ledger known as a blockchain. These pieces of data can be bought, sold, or traded. These tokens are associated with specific digital or physical assets.
Once you own an NFT, you have the license to use, display, or replicate the associated asset. If you want, you can trade or sell the NFT on a digital marketplace.
NFTs are similar in some respects to cryptographic tokens, however, unlike cryptocurrencies like Bitcoin, NFTs are not fungible. This means that if you had one unit of the cryptocurrency, Cardano, you could expect the Cardano price to be exactly the same for all other units in existence at any given time.
An example of something that is non-fungible would be a theater ticket. Even when tickets are the same price, the seat number, date, and time of the performance may differ.
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Where cryptocurrency and NFTs find commonality is in the fact that they are all traded using blockchain technology.
What Type of Assets Are Made Into NFTs?
So far, many NFTs have been works of art that are displayed in various collections usually made by an NFT Generator, however, there are other applications. As the new iteration of the internet, known as the metaverse, evolves, NFTs are being used to portion out digital land in virtual reality spaces such as buildings on the Decentraland platform.
Several bands have thrown their hat into the ring and are producing music on NFT. These NFTs will have perks for the buyer, such as limited-edition merchandise.
How Do You Buy NFTs?
NFTs are sold on digital marketplaces. At the moment, these are opening up quite rapidly as many companies are hoping to become dominant players in this new field.
The largest NFT marketplace is currently OpenSea. Unlike buying on conventional eCommerce sites, buyers should do some research before making purchases.
What Have We Learned From this NFT Guide?
The big takehome from this NFT guide is that these decentralized tokens are going to be big. Investing in digital art may be the future as galleries in the metaverse are already proving to be very popular.
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