The cryptocurrency market is vast and has endless possibilities. Thanks to blockchain, things have been not only about the currencies but about how one can have collectibles on the web. NFT is one of the recently grown parts of this vast industry and it isn’t a bubble, to be very clear. What has been happening for decades in the offline world, is now going online.
What is NFT?
It is a Non-fungible token.
These are digital assets that you can own and have proof of ownership of it. The words non-fungible here mean that what you own here is one of a kind and there won’t be a copy of it, and you own a unique asset. These assets are backed by Blockchain technology, so the data about its ownership and transfers are all on the web and don’t get lost.
Many get confused between Cryptocurrencies and NFTs, and while both work on Blockchain technology, Crypto is just like currency where the value stays the same among one another, for example, 1 Bitcoin is priced exactly the same as another Bitcoin, and 1 Litecoin is priced the same as another Litecoin. That is not the case with NFTs, as each NFT or asset holds its own value and there is no similarity between two NFTs.
A question that arises in the minds is about the authenticity and uniqueness of the NFTs, and it is easy to replicate and copy an art, or any collectible that is being sold digitally. The NFTs actually come with a digital signature and that is placed via encoding, and these NFTs are minted online, and thus you cannot practically replicate an NFT that was minted and sold online.
What things can be NFTs?
Actually, anything can be built into an NFT. Even a tweet, with the co-founder of Twitter selling his first tweet as an NFT, but what we have commonly seen as NFTs are as follows.
- Art (Designs of any theme)
- Collectible things
- Virtual avatars
- Theme-based avatars
- Video game skins
While an art collector would be buying a piece of painting in the offline market, and they actually get a physical painting in hand, the same can be obtained online as an NFT or a digital file. These come with exclusive ownership rights, and one NFT can be owned by only one person, and if someone else wants it, they get it only through a sale or a transfer from the previous owner, and the transfer is also recorded on the blockchain as a proof to show the transfer of ownership.
Where can one buy NFTs?
There are several marketplaces where one can buy NFTs, and some of the famous ones include:
- Crypto.com NFT
- Binance NFT
- Nifty Gateway
Does the value of NFT only increase with time?
No, this assumption is wrong. The value of NFTs depends on their uniqueness, and the interest around them. There is no real influencing factor for the NFTs pricing, except for the demand around them.
An art that is likable, and has gone viral, would see an increase in its pricing, or if the virality around the topic with which the art is made goes down, who knows, the value of the NFT could easily fall.
Hey, NFTs are cool. They are easy collectibles and you won’t see them wear off and they aren’t even sensitive to physical pressure, or weather, but these are not for everybody. Some have made millions of dollars selling NFTs, while some have just spent buying some useless stuff just because of NFT and practically saw those having no buyers later and the value fell badly.
You can always take a good look at whatever’s new in the market, but make an informed decision if you are to invest in NFTs.