Everything You Need to Know About NFT (Non Fungible Tokens)
Football superstar Lionel Messi and Bollywood superstar Amitabh Bachchan have each launched their own branded NFTs, which are themed around their lives.
NFTs have taken the world by storm and it has led to the surge in the market for non-fungible tokens (NFTs) is growing quickly. NFTs are similar to traditional collectibles like baseball cards, and they’re gaining in popularity thanks to the interest of big brands and celebrities.
What Is NFT?
A non-fungible token (NFT) is a type of digital asset that exists on a blockchain and serves as a record of ownership. You can use NFTs to represent unique digital objects, from collectible kitties to painting or live sketches.
The one-of-a-kind digital assets that are immune to duplication. They are also generally rare, making them popular among collectors. This is in contrast with most digital creations, which are almost always infinite in supply.
The rapid growth of NFTs can be attributed to the mass adoption of blockchain smartphones, which are able to seamlessly combine the useful functions of mobile phones and gaming consoles.
The reason for this surge is mainly attributed to the increase in the market cap of cryptocurrencies in early 2021, which led to an increase in demand for digital goods. NFT trading volume is skyrocketing.
Specifically, NFTs are data structures made up of three things: (i) what’s owned, (ii) who owns it, and (iii) some other information about the thing. All NFTs are part of the Ethereum blockchain. The Ethereum blockchain is a cryptocurrency, like bitcoin or dogecoin, but it also supports these NFTs which store data.
Non-fungible tokens (NFTs) are units of data stored on a blockchain digital ledger. Each NFT acts as a kind of certificate of authenticity, showing that the digital asset it is associated with is unique and not interchangeable.
A big plus with an NFT can never be changed, never be adjusted, and never be stolen because of the principles of cryptography that make the blockchain.
An NFT is created or “minted” from digital objects that represent both tangible and intangible items including artwork, GIFs, videos and sports highlights, collectibles, virtual avatars, and video game skins, designer sneakers, and music.
Should I Buy or Invest in NFT?
It’s a question many are asking. The risks associated with buying NFT are important to know before you dabble into it. It is a new asset and is volatile.
Many environmental experts are worried about the high levels of energy consumption involved. Here are a few other factors to bear in mind.
Even with all the experts who say that NFTs are here to stay, there are many who question the market’s longevity and see it as a bubble.
A big selling point of NFTs is that they allow digital artists to claim ownership of their work.
Previously it was difficult to earn anything from files that people could download and share for free (often without the artist’s permission). However, this does not mean NFTs are immune to fraud.
Unfortunately, there have been cases of artists who have found their work has been tokenized without their knowledge.
It’s not clear how artists can reclaim ownership of their work once it’s been wrongly entered onto the blockchain in someone else’s name.
Like cryptocurrencies, NFTs can be stolen. If you keep your NFTs on the exchange that you bought them from, make sure to have a strong password and two-factor authentication. If you’ve purchased a high-value NFT, it might be worth storing it offline in a secure location that is difficult to hack.
When you buy an NFT, it’s important to know that the artist might retain the copyright. Many artists are not comfortable with buyers modifying or reselling their art, so it’s important that you only buy if you’re okay with this.
How to Buy NFT (Non-Fungible Tokens)
Marketplaces to buy and sell NFTs are available and you can choose a marketplace based on the requirements you have.
A majority of these websites have secondary marketplaces with a variety of NFTs, but each platform operates slightly differently.
OpenSea is a popular marketplace for NFTs that operates on Ethereum which also allows the users to interact with the network to exchange non-fungible tokens for cryptocurrency.
Having a variety of digital collectibles, from video game items to digital artwork. In order to use the platform, you need a web3 cryptocurrency wallet such as MetaMask.
You can trade your NFTs on any of the secondary marketplaces, just like you would any other cryptocurrency. Since each NFT is unique, it is not possible for anybody else to recreate this particular NFT.
Your Ethereum wallet address acts as a username and password and lets you interact with certain platforms like OpenSea. Once you’ve connected your wallet, you’re ready to start browsing the market and placing bids!
Another good way can be to buy NFTs are Ethereum-based tokens, most marketplaces for these collectibles accept only Eth tokens as payment.
If you already have an account with a cryptocurrency exchange, you can purchase Ethereum on it and send your crypto to your MetaMask wallet. If you don’t already have a crypto exchange account, Coinbase and eToro are good options for beginners.