NFT talk has literally taken over the internet in last few months. From Instagram and Twitter to CNN News, the topic has confused a lot of people.
Thousands have begun to wonder what NFTs are and how they can create. Well, you are at the right spot. Today we’ll clear every single doubt about this popular yet so complicated term.
Let’s begin with a simple definition and meaning of NFTs.
WHAT IS A NON-FUNGIBLE TOKEN (NFT)?
To understand Non-Fungible Token well, you need to understand a Fungible Token first.
To put it in simple terms: If a 100 rupee note were swapped for five 20 rupee notes, it would still have the same value, which makes the note fungible (replaceable).
Shah Rukh Khan signing this 100 rupee note would transform it into a completely unique item, and its value would be much more difficult to evaluate since it’s no longer simply worth five 20 rupee notes and becomes non-fungible (irreplaceable).
Therefore, Non Fungible Tokens cannot be traded for anything else.
As with any investment, its value will fluctuate based on circumstances in the future.
THE DIFFERENCE BETWEEN NFTs AND CRYPTOCURRENCIES
As cryptocurrency is fungible, all Bitcoins are equal in value to one another. Tokens are not fungible, however.
Due to the uniqueness and irreplaceability of NFT tokens, one non-fungible token cannot be valued the same as another. Each token carries a unique, non-transferable identity, which makes it distinct from others.
Due to their reliance on blockchains, they could also be used to remove intermediaries and connect artists directly to audiences or manage identity.
WHAT IS A BLOCKCHAIN?
Blockchains store information electronically in digital format. They are best known for playing a critical role in cryptocurrency systems, such as Bitcoin, for recording and monitoring secure transactions decentralized and securely.
Decentralized blockchains ensure items are stored securely. This is because they are immutable, meaning data entered is irreversible.
Blockchain-based NFTs allow you to track who owns unique digital assets and sell and buy them.
HOW TO BUY NFTs?
If you have a hobby of collecting rare artifacts and you’d want to pursue it digitally, you must be thinking about ways to purchase NFTs.
Well, we have mentioned the clearest way to your first NFT deal.
OpenSea is the easiest platform to browse and purchase NFTs. There are many platforms out there, including Rareble and Mintable, but OpenSea is by far the biggest one.
In order to purchase NFTs, you must possess Ether, the cryptocurrency that resides on the Ethereum blockchain.
Coinbase, for example, is a crypto exchange that allows you to buy ETH. To store it, you need to set up a digital wallet. You will need access to this wallet to buy NFTs later.
After that, you need to connect the wallet to OpenSea, which you can do by going to the profile section on OpenSea.io.
As soon as you’ve done all that, you can view an endless amount of NFTs, which range from cheap ‘buy it now’ items to expensive pieces that are available at auction.
Despite some of the NFTs being listed for free, there is usually a ‘gas fee’ associated with owning them, as it takes energy to make a blockchain transaction.
NFTs AND ITS ROLE IN METAVERSE
Non-fungible tokens (NFTs) play a major role in the usefulness and popularity of the Metaverse. NFTs are secure types of digital assets based on the same blockchain technology used in cryptocurrencies.
Instead of currency, NFTs can represent artwork, songs, or digital assets. NFTs provide owners with some sort of digital certificate or proof of ownership that can be purchased or sold in the Metaverse.
So, NFTs are going to play a vital part to make Metaverse a success.
THE FUTURE OF NFTs
The NFT will arguably be used to track ownership of real estate, college degrees, professional licenses, event tickets, and countless other contracts currently on paper. It takes time for all of this to bear fruit. And in some cases, most people may not even know that NFT technology is being used by them.
As with other new technologies, it is impossible to predict how developers, builders, and enterprises will use NFTs and the innovative smart contracts that underlie them.
To be honest, the future NFTs hold for it may far exceed our interpretation and imagination.
