If you have ever heard of the word Non-Fungible Token (NFT) between conversations of investors but had no idea about it, then don’t perry, you are not alone!
Until now, Non-Fungible tokens were not so famous. But recently they have conquered the market.
Right from art and music to tacos and toilet paper, these digital assets are in the notice like Shark Tank came into the limelight!
In this comprehensive guide, we have covered all the important details that you should know about non-fungible tokens.
Table of Contents
WHAT IS A NON-FUNGIBLE TOKEN (NFT)?
An NFT is a digital token that uses the blockchain to specify the authenticity and ownership of a different asset.
“NFT is an abbreviation of the Non-Fungible Token, which points to its uniqueness and cannot be changed for another asset. “
Fungible is a term that is used to explain assets that are indistinguishable. As we all know that currencies are fungible, for example, each US Dollar holds the same worth for all the people. On the other hand, the paintings are non-fungible, as there can be no two paintings exactly the same.
Though NFTs have been in the market for a long time, it exploded in the market recently.
For artwork, in-game assets, sports cards, and other assets that are valuable to specific groups of people, NFTs allow the authenticity and history of ownership of the asset to be verified if fraud would otherwise be possible.
During the lifecycle of an asset, it may change owners several times. After all, if you were to buy an ultra-rare trading card, you would want it to be authentic.
The assets of communities such as gaming fandoms or card collectors are highly valued.
**NFTs allow communities to express what they value by owning the assets in a verifiable way.
**That’s why communities spend millions on NFTs that showcase their prized goods.
No exception applies to the art world. NFTs offer a plethora of unique assets, making them a haven for artists everywhere.
WHERE & HOW CAN I BUY NFT?
NFTs are placed in different places on the basis of their context. For instance: you will find gaming NFTs in games and painting in the auctions.
You can find most of the NFTs for sale or auction on online NFT Marketplaces.
Now, the question is what are the NFT Marketplaces?
There are many NFT Marketplaces, such as:
- OpenSea
- Rarible
- SuperRare
- Foundation
- Nifty Gateway
In brief, all you need to do to purchase an NFT is connect your crypto wallet, like Trust Wallet, and then buy the NFT you wish to.
HOW DOES AN NFT WORK?
NFTs work on blockchain, which is a distributed public ledger that keeps a track of transactions. You might be well-versed with the blockchain as that makes the process of cryptocurrencies possible.
Mainly NFTs are held on the Ethereum Blockchain, also another Blockchain supports them as well.
An NFT is curated or should I say minted from digital objects that are both tangible and non-tangible items, including:
- Art
- GIFs
- Videos and sports highlights
- Collectibles
- Virtual avatars and video game skins
- Designer sneakers
- Music
Not only this but tweets are also considered. The founder of Tweet sold his first-ever tweet as an NFT for more than $2.9 million.
So, basically, NFTs are like physical collector’s items, but only digital. So, instead of getting an actual painting that you can hang in your house, you will be getting a digital file of it.
You will also get exclusive ownership rights. Yes, you heard it right!
Only you will be the owner of that painting and no one else. The owner or curator can also save the specific data inside them. For instance, the creator can sign their artwork by including their signature in an NFTs metadata.
POPULAR NON-FUNGIBLE TOKENS
- CryptoKittes
It was released in November 2017 on Ethereum. An NFT possesses one-of-a-kind genes that can be used to breed even more unique kitties. You can buy and sell these kitties to develop your collection.
CrytoKitties brought notice to the power of the NFT. At its highest, it consumed the Ethereum network by 10%.
2. CryptoPunk
It was released in June 2017 on Ethereum. There are 10,000 unique characters known as punks, which vary in rarity and thus perceived value. Every punk is represented by an NFT. They are all bundled with an assortment of common and or different features allowing differentiation in the values.
3. Gods Unchained
It was released in November 2019 on Ethereum. The concept behind it is very simple, it is as Win cards by outplaying your opponents’ cards in matches and tournaments. Cards have a differing rarity and thus different values.
HOW DO I CREATE(MINT) MY OWN NFT?
To create your own NFT, firstly you will have to choose a blockchain network that is according to your needs. Different Blockchains are for different needs, so choose the best one for yourself.
Ethereum is the network that made the NFTs famous and well-known. However, you can also go for Binance Smart Chain if you want to go with lower fees and also speed.
Minting an NFT Requires:
- A Blockchain wallet
- An account of crypto to pay for the minting
- Belonging to the digital item that you are minting.
FINAL WORD
This concludes the A to Z of NFTs. Since NFTs have become more sophisticated and integrated into the financial infrastructure, the concept of tokenized pieces of land with varying values and positions could be applied in the modern world. Therefore, the combination of art and collectible attributes appears to be a powerful way of attracting new buyers.
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