You may have heard that digital assets are going mainstream. Arguably, digital assets are the next big thing and by now, we cannot deny their skyrocketing popularity. NFTs or better known as non-fungible assets are worth millions. Perhaps you’re still wondering! What are NFTs? They are unique assets that exist on a blockchain, and CAN’T is replaced with something else. Although NFTs include everything from music to a website domain, digital artwork is the most popular.
Let’s pause for a minute….
Many people find it difficult to understand what NFTs mean. It can be even mind-boggling to grasp why so much money is being invested in an artwork that is stored in a digital form.
Well, here is everything you need to know about this trending phenomenon.
First things first….
What is an NFT (non-fungible token)?
An economist will tell you that a fungible asset is something with units that can be interchanged i.e., money.
But, if something is non-fungible, it means it can’t be replaced with something else. The reason being NFTs have unique properties. HOLD YOUR BREATH FOR A SEC… Let take the Mona Lisa painting as an example. It’s one of the most famous paintings in art history of all time-Meaning you can take a photo of the painting, but there will always be one original painting.
One important thing to note so far is that NFTs can be bought and sold like any piece of property but they have no tangible form of their own. NFTs are commonly bought with cryptocurrencies, but in other cases, they are bought in fiat currencies. Remember, transactions are recorded on the blockchain.
Perhaps you’re wondering how an NFT is different from cryptocurrency…stay with me
NFT vs. Cryptocurrency
I suppose you’re now used to the term ‘non-fungible token.’ One major similarity between NFTs and Cryptocurrency is that they are built using the same programming technology.
What is considered fungible you may ask? A good example is physical money or cryptocurrencies. The fact that they’re also equal in value means that it makes them trusted means of exchange on the blockchain. What do I mean? One Ethereum will always equal another Ethereum.
NFTs are completely different. Each NFT has a unique signature which means it cannot be exchanged. The blockchain allows anyone to verify the ownership of an NFT.
Now let’s shift our focus elsewhere, and look at how an NFT work
I have severally mentioned that NFTs exist on the blockchain, and if you’re not a newbie in the crypto world you know it’s a distributed public ledger that records transactions. Blockchain is the underlying process that supports or makes cryptocurrencies possible.
NFTs can include anything from art, music, avatars, domain names, and non-digital collectibles.
Listen to this….
NFTs get exclusive ownership rights. This means that they only have one owner at a time. NFTs’ unique data makes it possible to verify ownership as well as transfer tokens between owners. The owner or creator has the liberty to store specific information inside them. For example, an artist can sign their artwork.
I believe by now you have an idea of what NFTs are. What you may not be aware of is what they are used for.
Let me quench your curiosity….
Blockchain technology and NFTs have provided an opportunity for artists and content creators to monetize their work. Initially, artists relied on galleries or auction houses to sell their artwork. However, with the current opportunity, artists can sell directly to consumers as an NFT, which comes with benefits-It’s more profitable.
Remember, art is not the only way to make money with NFTs. They can also exist in different forms including videos, music, and text. Surprisingly, tweets can be bought and sold as NFTs.
Twitter CEO Jack Dorsey sold his first tweet for, $2.9 million as an NFT. The tweet which was published on March 21said “just setting up my twttr.”
Now let’s get to the juicy part.
How to buy NFTs
If you’re enthusiastic about this journey and want to start your NFT collection, you will need the following:
A digital wallet to allow you to store NFTs and cryptocurrencies.
Once your NFT is set up and funded, you’ll need to familiarize yourself with the different NFT marketplaces:
Here is a list of popular NFT Marketplaces
- OpenSea.io-This peer-to-peer platform will allow you to discover, collect, and sell unique NFTs.
- Rarible-This is a democratic, open marketplace that allow artists and content creators to issue as well as sell NFTs.
- Foundation-The platform is a bit unique because artists must receive an invitation from their fellow creators to post their art.
NFTs are risky considering their future is uncertain, and there isn’t enough history to judge their performance. To say the least, investing in NFTs is largely a personal decision.