What is NFT? How it works, benefits, etc..
April 22, 2022
What is NFT? – Art work and photography and content creation have been in vogue, however, may have been under appreciated in the past. Pointers in recent time have shown that NFT has occupied the center stage.
Piece of digital artwork are now being sold in the internet, where you acquire them as well as get a unique digital token to prove your now existing authority over the beautiful artwork.
For the record, while Bitcoin dominates the digital currency space, the NFTs now dominate the “Collectibles.”
You can make a lot of money from NFTs, just recently Twitter co-founder Jack Dorsey sold his first tweet as NFT for more than $2.9 million, isn’t that crazy?
The question has moved from what is NFT to how can I make the most with NFT among artists and content creators.
In any case you suddenly picked interest in NFT or wants to understand its dynamics, how it works and possibly benefit in the process, look no further, you just arrived at the right place.
Stay calm and read through, I’ll break down in bits and pieces the conceptualization, uses of NFTs and how they work in this web page.
What is NFT?
To understand this subject, let’s start with a practical explanation of letters that form the “NFT” itself.
NFT means “nun-fungible token, in this case it is not divisible, cannot be replaced or manipulated to form an extension of it under whatever social or economic guise.
NFT is a digital asset, an internet collectibles like art, music, games with unique certificate build on blockchain technology.
NFT gains relevance given the fact that it’s exchanged with cryptocurrencies like Bitcoin, with this ownership of NFTs become relatively easy as well as being sold when no longer needed.
Are NFTs different from cryptocurrencies?
NFT is a non-fungible token built using same kind of programming as the cryptocurrency, like Bitcoin or Ethereum, this is the only similarity.
Fiat currency and cryptocurrencies are divisible which means they are fungible, in this case they can be traded or exchanged for one another, additionally the fiat and crypto assets are equal in value. Just like $1 equals $1 and 1BTC equals 1BTC.
In this case NFTs have different signatures that make them impossible to be exchanged for one another or equal other.
How does NFT work?
NFTs are held on Ethereum blockchain, however, are supported by other blockchains too.
NFT is minted or created from digital objects that consist of both tangible and intangible items like,
- Domain names
- Sneakers in fashion
- Video and sports highlights
- Music, etc.
In a clear perspective, NFTs are like physical collector’s items, strictly digital. Buyers get digital files mainly instead of wares and items.
With this regard, NFTs have exclusive ownership rights attributed to them for a buyer, where they can only have one or single owner at a time.
NFTs can be verified given their unique data, in this case ownership can be ascertained and tokens being transferred between owners. Every owner or creator can store specific information inside the NFT.
Uses of NFTs
With advent of NFTs, artists and content creators now have a unique opportunity to monetize their work. In the past, artists do rely on auction houses or galleries to sell their art.
Alternatively, the artists can now sell their work directly to buyers as NFT, going by this they even keep more of the profits.
Loyalty program entails that artists can receive percentage of sales whenever their art is being sold or inherited by a new owner.
NFTs can be auctioned to raise money for charity.
How to buy NFTs
To buy NFT you will need a digital wallet that enables NFT and cryptocurrency.
- You will need to sign up with a crypto exchange
- Create your crypto asset account
- Visit Opensea.io or download the app
- Connect your Ethereum wallet address to Opensea
- Your Ethereum wallet automatically becomes your NFT wallet.
You can buy crypto/Ethereum using the Peer-to-Peer feature on platforms like Koinwa, eToro, Kraken, Coinbase or Paypal.
Do not buy NFTs based on speculations, not even because you can buy them. NFTs are risk assets because their future is uncertain, there’s no avalanche of history to judge their performance.
NFTs may worth investing small amount from your portfolio.
Raphael Orji is a freelance writer, professional blogger and a content marketing consultant. I work with small businesses, startups and entrepreneurs in building their brand image with high quality blogging and content marketing strategy.
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