What is NFT? Everything you need to know about NFTs
NFT is the new trending thing on the internet after the cryptocurrency boom. NFTs have been around for quite a few years but became really popular in recent months. Some NFTs are worth millions. Recently one of the NFT was bought at around $532M. As per an infographic of Expensivity, NFTs made a staggering $2.5 billion in just the first 6 months of 2021. Twitter’s founder Jack Dorsey also put the first-ever tweet’s NFT on auction and it reaches a bid of $2.5M. This shows how everyone is trying to join the NFT league. You can also design and sell your own NFTs. So, lots of people are interested in learning about NFTs. That’s the reason I decided to write a simple and explanatory guide on NFTs.
What is NFT?
NFT is the short form of Non-Fungible Tokens. NFT is a digital asset that represents real-world objects such as drawings, music, paintings, and videos. Non-fungible means unique that cannot be replaced with something else. So, owning an NFT means you own the original item. The unique data of NFT makes it easy to verify their ownership. If you own the NFT of actual oil paint, it means you are the actual owner of the oil painting even if you don’t have it to hand on the wall.
In NFTs, the artwork is “tokenized” by creating a digital certificate of ownership. This token can be bought and sold. The record of who owns the artwork’s digital form is stored on a shared ledger known as the blockchain. The record cannot be forged because the ledger is maintained by thousands of computers around the world.
NFT is built using the same kind of programming as cryptocurrency. NFTs are typically held on the Ethereum blockchain, but other blockchains also support their own kind of NFTs.
How to purchase NFTs?
If you want to own an NFT collection, you need to first get a digital wallet that lets you store NFTs and cryptocurrencies. Then you need to own some cryptocurrencies like Ether. Cryptocurrency depends on your NFT provider. There are several platforms like Coinbase where you can purchase crypto using a credit card. Then you need to join a trusted NFT Marketplace and link your crypto wallet for payment. NFT Marketplaces accept crypto payments. Most of the NFT Marketplaces accept Ethereum.
Popular NFT Marketplaces
There are also several other platforms where you can buy NFTs. But you shouldn’t go and try any random platform. Some may be scams. So, make sure you are only joining trusted NFT platforms. Here are some popular and trusted marketplaces where you can shop NFTs.
Should You Buy NFTs?
Just because you have a lot of money, it doesn’t mean you should buy NFTS. NFTs are risky because we cannot predict their future. It may be worth investing small amounts to try it but you should avoid spending huge amounts on buying NFTs. NFTs value is entirely based on what someone else is willing to pay. If you buy an NFT for $1000, it could be later sold at a much higher or a cheaper price. It all depends on its demand.
So, do your own research, understand the risks and then spend your hard-earned money on it.