The non-fungible tokens or NFTs are now the latest blockchain-related phenomenon that is taking over the crypto world. There are plenty of celebrities, musicians, artists and the like who spend hundreds of dollars just to own or buy NFTs.
Since NFTs are one of the most lucrative and unique potential assets these days, many people are becoming interested in them. Here at BTC Post, you will be reading all about the things you need to know about NFT and how it became popular today. Start by learning what NFTs are below:
What are NFTs?
In simple words, NFTs are digital works of art that can serve as collectables and assets. They are linked to a blockchain where they can also be sold or bought. These digital assets can be in the form of GIFs, tweets, music, images, video game skins, virtual real estate and others.
NFTs and cryptocurrencies are built using the same kind of programming since they both exist on a blockchain. But unlike cryptocurrencies, NFTs are non-fungible. This means that no two NFTs are the same and they can’t be replaced with another one of the same value. Think of them as a collector’s item in digital form.
While you may think that you can just simply screenshot or download the NFT, there is more to it than being simple digital art. NFTs have built-in authentication that serves as proof of authenticity. There are even certificates that can prove your NFT ownership.
NFTs have been around since the inception of Bitcoin in 2009 and was followed by some of the earliest NFTs created in the Ethereum network in 2015. However, it was not until 2017 that the popularity of NFTs rose. Read on to learn more about the history of NFTs below.
The history of NFTs
The first NFTs are the coloured coins that were built on the Bitcoin network and can be traced back to 2012. These coins are small units of Bitcoin that can represent any asset. However, the Bitcoin network did not support coloured coins which led to its cessation from the market.
When creators on the Ethereum network decided to have their take on NFTs, they managed to create some of the most popular ones like CryptoPunks in 2017 and CryptoKitties in 2018. CryptoPunks has 10,000 24×24 unique and pixelated characters that have different rarities, types and attributes.
CryptoKitties, on the other hand, is a virtual game that allows players to raise, breed and trade virtual cats. This project even appeared on mainstream media such as CNN, the Financial Times and CNBC.
The main properties of NFTs
Check out how you can differentiate NFTs from other crypto projects by learning their main properties below:
- Unique: NFTs are considered unique since they have specific code information that makes them different from others.
- Traceable: Each NFT can be traced on the blockchain starting from when it was created up to the time when it was bought and sold.
- Rare: NFTs are rare to ensure their scarcity and increase their demand from buyers in the long run.
- Indivisible: Just like a concert ticket, NFTs can’t be divided or bought as fractions of a whole.
- Programmable: Since NFTs are built on blockchains, they are programmable and can have coded breeding mechanics to ensure more functionality
Uses of NFTs
NFTs can be extremely useful since they can be utilised in many cases. Take a look at some of the key uses of NFTs below:
- Collectables: Since NFTs are unique and one of a kind, they can be considered digital collectables. Some physical collectors’ items such as baseball cards and stamps can now be converted into NFTs.
- Gaming: NFTs can be in the form of tradable items in games such as cards. These types of cards are the ones being used in crypto games like Axie Infinity and Gods Unchained.
- Art: Artists can now monetize their digital artwork by converting them to NFTs. This way, they can protect their copyright and receive royalties.
- Virtual and real-world assets: Virtual worlds such as Decentraland and Crypto Voxels sells tokenised real estate in the form of NFTs. Real-world assets such as Nike’s shoes are now also being converted into NFTs.
- Identity: NFTs can now be used for cyber security since they can protect your identity and other information like your medical history. By converting your files into NFTs, you can ensure that you are not being impersonated since your NFTs can’t be duplicated nor be linked with other digital assets. These can be done through the use of cryptography as well as smart encryption and validation.
Frequently asked questions about NFTs
Apart from the important details of non fungible token, take a look at some of the most asked questions about NFTs below:
Who can buy, create or sell NFTs?
Almost anyone can create, buy or sell NFTs. You just need to have a digital wallet, Ethereum (ETC) tokens and a connection to an NFT marketplace. Then, you just have to upload your creation to the marketplace and follow their instructions on how you can turn your product into an NFT or how you can buy one.
How can I buy NFTs?
Almost any art, music, video or photo can be bought as an NFT, but there are various things that you should consider before you buy one. This includes the marketplace you will buy the NFT from, the type of digital wallet you have to store them and the kind of cryptocurrency you need to use.
For instance, most NFTs are on the Ethereum blockchain so you need to get ETC instead of other popular cryptos such as Bitcoin (BTC). However, a few NFTs can also be bought using other digital tokens. Once you have determined the marketplace, digital wallet and cryptocurrency you need to use, you are now ready to buy NFTs. Here are the common steps you need to take when buying an NFT:
- Get a digital wallet where you will store your cryptocurrencies and NFTs.
- Purchase some crypto such as ETC tokens or whatever digital coin your NFT provider accepts.
- Create an account on your desired NFT marketplace.
- Browse the selection of NFTs and follow the marketplace’s instructions on how to buy one.
Where can NFTs be bought?
Some of the most popular and largest marketplaces where you can buy NFTs are OpenSea, Mintable, Rarible and Nifty Gateway.
Are NFTs useful?
NFTs can be extremely useful in different ways. For example, the Bored Ape NFT owners can have access to an exclusive online community. Axie Infinity and Zed Run, on the other hand, are NFT-based games that allow you to earn crypto while playing.
Learn more about NFTs
There is an undeniable craze over NFTs which makes many people question the hype of the phenomenon. NFTs are still considered new and there is not a lot of history available to see if it is worth investing in. Thus, buying or selling one is a completely personal decision.
Keep in mind that you should treat NFTs just like how you would on any investment. This is because an NFT’s value is based on how much people are willing to pay for it so you always have to take risks.
Learn more about NFTs and other crypto projects by reading here at BTC Post!
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