If you’ve been on the internet for the past few days, you may have heard of NFTs. NFT stands for “Non-fungible” token, meaning something that is unique and can’t be replaced with something else. For example, a Bitcoin would be classified as fungible because you can trade one Bitcoin for another Bitcoin, and you’d end up with the same thing. On the other hand, something non-fungible would be like a one-of-a-kind trading card.
So how do NFTs work? Well, NFTs are part of the Ethereum blockchain. That may sound familiar because Ethereum is a cryptocurrency, but its blockchain also supports NFTs. According to ARTnews, this allows NFTs to consist of an encrypted image or video file, accompanied by a digital signature that cannot be duplicated, giving buyers the assurance that their purchase is an authentic copy. Anything digital could be sold as an NFT, from digital art to music, one guy even sold an x-ray of his teeth. It seems to sell NFTs successfully though, having a platform beforehand or being a celebrity helps because it adds more intrinsic value to your NFTs. But if you’re not a celeb you can still make a buck by working NFTs like any other speculative asset, where you buy it in hopes that the value of it goes up someday, so you can sell it for a profit.
Depending on what type of NFT you want, you can go to different websites. If you are looking to own NBA highlights checkout NBA Top Shot. If you are looking for art checkout Nifty Gateway. Will you be buying any NFTs soon?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
Originally published at https://invstr.com on March 4, 2021.