NFTs, Explained…

Newbie’s journey about Non-fungible token

Photo by Tezos on Unsplash

NFT’s appear to be widespread in the past few years. This could be a virtual drawing or something physical like a real state or fine art.

In this beginner’s guide, I explain everything a beginner should know about NFT.

What Exactly is NFT?

NFT represents a non-fungible token.

This doesn’t make it clear, right?

Let’s explain in detail.

NFT is a digital asset that symbolizes real-world products such as art, music, sporting goods, and videos.

Cryptocurrency can be used to buy and sell.

Although NFT has been around since 2014, it is becoming more popular to sell and buy artwork. The market worth was $41 billion alone in 2021.

Pak’s “The Merge,” which sold for $91.8 million, became the most expensive NFT in history.

You can see the most expensive NFT listing here.

Why do people want to spend millions?

If anyone wants to view the individual images, they can see the images online for free. So, why are individuals prepared to spend millions of dollars on something that they could easily capture or download for free?

Because NFT enables the purchaser to keep the original, the “digital bragging rights” are almost as valuable as the item itself to collectors.

How do NFTs Work?

Now, we have covered some basics. Let’s dive a little deeper into how NFTs work.

If you think about buying NFTs for yourself, it’s important to know about this niche blockchain sector before risking any penny.

Non-Fungibility

In a nutshell, the physical currency we use every day to make purchases is fungible.

For example, if you have $10 and you need some change for a vending machine that accepts $5, you can ask someone to provide small denominations and swap your money. The value of $10 will be the same. This is called fungibility.

But for NFT you can’t swap assets for another as each token is unique.

For example, an artist creates a new physical drawing and then decides to create an NFT that represents the value of that painting. This means that this NFT is unique and can’t be imitated or copied because each NFT is verified by blockchain technology. And thus, it becomes non-fungible.

Blockchain Technology

All NFTs are hosted by blockchain technology. Ethereum blockchain is most preferred. Although other blockchain networks like Polygon, Klaytn, Solana, etc., support NFT due to the high transaction fees of Ethereum.

NFT Minting

When people search for the best NFT, a term that may often come is “minting.” In simple words, minting refers to creating a new token that does not exist yet.

As soon as your NFT is minted, it can be traded in the open marketplace. In fact, if you ever mint any NFT, you will receive royalties on each sale that a third party will generate.

Fractional NFTs

You don’t need to buy a full token to gain access to the market. Bitcoin, Etherium can be split into smaller units which ensures the fractional purchase.

So, if you invest $1000 but the token prize is $10000, you will own 10% of the token.

This is one of the greatest characteristics of NFT, which allows multiple people to own an NFT.

What are NFTs Used For?

Physical Real Estate

Real Estate is perhaps the most interesting aspect of the NFT marketplace because it covers physical and virtual property.

Virtual Real Estate in the Metaverse

NFT and Metaverse is a term which has been spelled on the same platform.

For those who don’t know, Metaverse is a digital representation of the real world. People can keep their NFT in the Metaverse world.

To know the popularity of NFT in the Metaverse world, let’s face some examples.

In Axile Infinity Metaverse Gaming World, a plot of land was sold at $ 2.3 million in November 2021.

NFTs’ popularity is growing day by day in the Metaverse world.

Sporting Moments

Another rapidly growing NFT sector is sporting Moments. Sports videos can be sold as NFT nowadays, and people are collecting these moments in the form of NFT. This sporting Moments NFT price is rising day by day.

Gaming NFTs

Some of the popular NFTs are found in the form of popular gaming titles. They are simply called “Play to Earn” or simply “P2E”.Axie Infinity, Decentraland, and the Sandbox are examples of it.

How to buy NFTs

If you are so eager to have your own NFT, then you have to follow a few tasks.

Number one, You need a digital wallet that allows you to store NFTs and cryptocurrencies.

You will likely need to buy some crypto, depending on which currency your NFTs accept.

Number Two, You can buy cryptocurrency using a credit card on platforms like Coinbase, even in PayPal and Robinhood now.

You keep in mind the charges while researching. Most crypto charges a small amount when you buy crypto.

Popular NFT Marketplace

Once you have set up your wallet and you have cryptos in your wallet, there is never any shortage of the NFT market. Currently, the largest marketplaces are Open Sea.io, Rarible, Foundation, etc.

Why people invest in NFT

Just because you have the ability to buy, should you buy it!

It depends.

NFT is unpredictable considering its history which is not deep yet. NFTs are so new and a small amount of investment for trial is perfect for now.

On the contrary, If you have a large sum of spare money it’s maybe worth considering investing in buying some NFTs.

But keep in mind, NFTs value is dependable on individuals who are willing to pay for it. So, price depends on demand rather than social, and economic conditions which typically influence stock prices.

All this means, that NFT can be resold less than previous and may not be able to resell at all.

In addition, Tax is also a great concern because you are buying it using cryptocurrency.

So, if you like to take the risk of losing, do your research, understand the risks and take the plunge.

Pros and cons

Before searching for this niche token, let’s look at the pros and cons once.

Pros

  • The Global NFT marketplace is highly liquid.
  • Low budget NFT is available
  • NFT market exceeded $40 billion as per Bloomberg
  • Two NFTs are different
  • NFT is a digital token

Cons

  • The value of NFT can be declined
  • NFT can be unsold

Bottom line

Many marketers predict that NFT is the future of digital art forms in the future world, especially in the Metaverse world. After all, NFT traded more than $ 40 billion alone in 2021.

So, NFT can be the only medium to get digital art from form artists who are physically so remote and artists can have a value in their arts through NFT.

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Rajesh Ghosh

Rajesh Ghosh

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l l Freelance writer l l Writes on health,wellness,Crypto etc. Want me to write for you. Let’s Connect: https://www.linkedin.com/in/rajesh-ghosh-contentwriter