What exactly are NFT (NON-FUNGIBLE Tokens)? What does NFT stand for?
The world was confronted with a new way of dealing with assets in 2021. Through blockchain technology, NFTs introduced the world to a new way of buying and selling physical and digital assets.
NFTs are not only for artists, but they are also revolutionising the gaming industry, e-commerce, fashion, entertainment, and defi platforms. With musicians, actors, brands, and large corporations launching NFT projects, it has become a buzzword in the decentralised world.
NFTs are not a new term to those of you who keep up with the tech world. NFTs, on the other hand, are a foreign concept to the majority of the general public and non-technologists.
The majority of people are sceptical of NFTs because they believe they are too technical to comprehend. The reality, however, is quite different. You don’t have to be a tech whiz to understand the concept of NFT.
Leaving aside the technicalities, we are here today to provide a very simple explanation of NFTs, as well as how to purchase NFTs and NFT platform.
What Are Non-Financial Transactions (NFTs)?
Non-fungible tokens (NFTs) are non-fungible tokens built on blockchain technology. It is a type of digital token protected by smart contracts.
Smart contracts are analogous to traditional contracts. These are self-executing digital contracts that execute automatically when the terms and conditions are met.
Unlike cryptocurrencies, each NFT is distinct and has a different value. It is because no two NFTs are alike, as each NFT represents a distinct asset.
For example, two $10 notes or Rs500 notes are the same and have the same value. I have no problem exchanging my Rs500 note with you. However, if one note has Ronaldo’s autograph and the other note has Messi’s autograph, the scenario changes.
Both notes are now extremely valuable due to the autographs of famous people on them. These notes are no longer worth what they once were. They are now both treated as assets with different values.
If you have the Rs500 note with Ronaldo’s autograph, you can sell it for millions of rupees to a buyer willing to pay for it. The same can be said for the other note containing Messi’s autograph.
Similarly, each NFT represents a unique asset. It could be a unique and valuable photo, video, song, meme, art, in-game item, or anything else.
NFTs are not assets in and of themselves. They function similarly to tokens or property papers in that they certify the buyer as the rightful owner of the asset they represent. NFTs are a type of digital certificate of ownership and proof of asset authenticity.
The NFTs also contain important asset information. This data is stored on the blockchain network, making these NFTs the most secure way to buy and sell assets.
All artists and creators have been empowered as a result of NFT’s decentralised and secure features. NFTs have given artists, whether they are painters, musicians, digital artists, or gamers, more control over their work. They have the ability to monetize, sell, and define the terms of sale as they see fit. NFTs have accomplished what their founder, Kevin Mc Coy, envisioned, from generating multiple income streams to freeing artists from the shackles of auction houses.
NFTs are no longer just decorative items. They provide special benefits and rewards to their customers. Some NFTs give you access to elite clubs and concert tickets, while others give you discounts on future releases, early access to the upcoming collection, sponsored trips, and even the opportunity to meet your favourite actor/singer.
What Does Purchasing An NFT Mean?
Before we get into how to buy NFT, let’s define what it means to own an NFT.
When you purchase an NFT, you are actually purchasing the right to own the asset that it represents. It means you are the rightful owner of the asset, and no one else can claim it unless you sell it.
Similarly, when you sell the NFT, you are effectively selling the asset’s ownership rights. The asset is now owned by the person to whom you sold the NFT.
How Do I Purchase NFT?
NFT platforms and NFT marketplace allow you to buy and sell NFTs. Some of the world’s leading NFT marketplaces include OpenSea, Rarible, Mintable, NFTICALLY, and Nifty Gateway.
All you have to do is create an account on one of these NFT marketplaces, link your digital wallet to it, and buy the NFT you want.
However, before purchasing any NFT, you must consider the following factors.
Investigate the company’s founders or artists.
Examine the company’s white paper.
Consider its rarity score.
Examine its potential market demand.
Consider its popularity in the NFT communities.
Purchasing an NFT is difficult because the NFT’s profit and price are determined by market demand and popularity. If you buy an NFT that does not have the potential to stand out in the market, you are losing money.
To purchase NFTs, follow the steps below.
Create an account on the NFT marketplace.
Connect your electronic wallet.
Sign in to your account.
Investigate for rare NFTs.
Investigate the NFT author, project, previous owners, and technology behind it.
Check its rarity score, popularity, and market demand as well.
Analyze its price before placing a bid.
Make sure you have enough cryptocurrency in your digital wallet to cover the NFT and gas fees.
Now it’s up to the seller to accept or reject your bid.
Buying and selling NFTs and NFT platforms entails more than meets the eye. You can learn more about NFTs by visiting our blog section (attach a link to our blog section if you wish).
A simple guide like the one above can assist beginners in understanding the concept and exploring the NFT space.