Non-Fungible Tokens, or NFTs, are digital assets that show ownership of digital artworks, in-game items, domain names, and digital and non-digital artifacts that are unique and cannot be replicated or duplicated, thus they are referred to as “non-fungible.” NFTs have made a significant impact since the pandemic started and is still on the rise to this date, but what exactly are NFTs?
What is NFT?
To explain NFTs let us break down the acronym: Non-Fungible Token. ‘Fungible’ refers to a product that can be exchanged, substituted, and is interchangeable regardless of its properties, but has the same value while ‘Token’ is what an item is called in a blockchain. For example, I lend my friend 1 bitcoin for some reason, and he pays me a week later with Ethereum but the same value of bitcoin. It means that disregarding the same properties of the first transaction, it still has the same value.
Non-fungible Tokens, on the other hand, are assets that, due to their unique qualities, cannot be duplicated, transferred, or substituted at the same value. NFTs are in the form of digital artworks (pictures, videos, arts) that are a one-of-a-kind asset that cannot be replicated by anyone. And to certify its ownership, each NFT is recorded and secured by a blockchain technology that serves as a digital signature and authorization to the owner.
Examples of non-fungible assets are collectibles (trading cards, old coins, art), precious gems, properties (land, homes, and buildings), vehicles, and many more.
How to Buy and Sell NFT
There is one question that occurs when it comes to buying NFTs, why are people buying them? At our present status where we are still in the midst of the pandemic and have so much time online, some people do not know what to do with their money and most of us genuinely wanted to invest in something new, and of course, why not?
Remember when cryptocurrency boomed in 2020–2021? NFTs market exploded in 2021, too. It is also in the middle of the pandemic and that means that this has something to do with people investing more in digital assets than traditional ones. We see it every day where we spend more time and interactions on social media as we move on to the digital future like the metaverse. We will never know in the near future, that NFTs’ value will be two to three times more than it.
For people buying NFT, you will need to have a digital wallet. Two of the most famous ones are Meta Mask and Coinbase wallets. You need to fund your wallet with cryptocurrency as it is the payment method that will be used in most of the NFT marketplace, especially Ethereum. After funding your wallet, you can browse the NFT collections on Open Sea (which is the top marketplace for NFT as of now). On this website, you can buy and sell NFTs, and can be a great place to start with. It also enables artists and producers to mint their own NFTs using a straightforward technique.
What are NFTs used for?
Since people nowadays have a lot of interest in cryptocurrencies and NFTs, we should break down what NFTs are used for.
Most creators mint their works in the NFT marketplace because they see profit in it, and they would like to be recognized for it, since they own it with their digital signature.
In terms of gaming, there are numerous advantages to items becoming NFT, which is why many people are attempting to create NFT games such as Axie Infinity. For newcomers, Axie infinite is the mother of NFT games, being the third largest NFT platform in terms of overall sales and its success is what started the revolution of NFT gaming.
Investments — As mentioned earlier, NFTs are more of an investment for most people because of their potential to skyrocket in the future and for the craze that people try to engage.
Future of NFTs
NFTs have a lot of potentials to increase and become more profitable in the future for anyone interested in investing. Video games are the best illustration of the future in NFT because they already know how things work in the market and everything about alternate currencies. In-game items can now be sold based on their rarity and quality. It’s similar to Axie Infinity in that it’s a Pokémon game with tradeable characters and things that are profitable and valuable. Another example is real-world assets, which confirm the ownership of items like as vehicles, houses, stocks, and other assets. NFT can assist them in preventing the resale of products that do not belong to them.
Overall, NFT is very innovative and has more to bring in the future especially we are approaching the world of the metaverse where our assets can be now all digital.