Your guide to non-fungible tokens (NFTs)
Digital assets are growing in popularity, and non-fungible tokens (NFTs) are the latest trend. In recent months, NFTs have seen many buyers.
This unique digital asset exists on the Ethereum blockchain. NFT enthusiasts see this as the next big phase of art collecting, which could benefit both artists and art collectors.
Trading of NFTs started around 2017, but this latest digital asset gained popularity in early 2021.
To many it may be surprising why NFTs are worth millions of dollars. Here are the important points you should know about NFTs, how they work and even how you can create your own NFTs.
What is NFT?
Irreplaceable means that these digital assets are unique and cannot be copied or replaced by anything else. These are digital assets on the blockchain, with each NFT having its own unique signature.
The ownership and authenticity of the NFT can be verified by those who wish to purchase it.
NFTs are not only digital art, but they can also be in the form of images, pictures, video clips, music or text. Even tweets and signatures can be bought or sold as NFTs.
How do NFTs work?
NFTs use a new Ehtereum standard blockchain ERC-721. The Ethereum blockchain supports NFTs, and it stores additional information to identify unique assets and help them work differently from the Ethereum cryptocurrency.
How to buy NFTs?
You can buy NFTs with cryptocurrencies. Some NFTs can also be purchased in dollars or fiat currencies. Every NFT transaction is recorded on the blockchain.
Is NFT a good investment?
Due to the rising prices, many people see NFTs as a good investment. Many buyers sell NFTs even within hours of purchase to profit from the price jump. NFTs are also emerging as a new opportunity for artists to monetize their artwork.
The creators of NFTs can receive royalties for each trade after their digital assets are sold for the first time.