NFT stands for 'non-fungible token'. When something is fungible, like a dollar bill, it is equivalent to, and can thus be exchanged for, any other dollar bill. In contrast, a non-fungible token is a unique asset in digital form that cannot be exchanged for any other NFT. This means that every NFT is a 'one-of-a-kind' item. NFTs are transferred from one owner to another using blockchain technology, which creates a digital trail from seller to buyer that verifies the transaction. This encodes the unique ownership rights to the buyer (new owner).
The physical world counterpart would be a unique collectible asset such as a piece of art, for which you might have a certificate of ownership attesting to its authenticity. The NFT with its blockchain technology replaces the need for certificates of ownership. There are even some NFTs that use blockchain technology to create a digital ownership certificate for a unique physical asset, though this is currently not common.
NFTs became a popular investment in 2021, even though they’ve been around since 2014. As cryptocurrency investing exploded, so did the idea of taking certain digital assets and selling them to investors to buy online.
How Do NFTs Work?
NFTs are marketed and distributed through online marketplaces such as Rarity.tools or NFTcatcher.io. Investors can look through an inventory of assets before choosing one to buy. One must have cryptocurrency to buy the digital asset and create an account on the NFT marketplace that is connected to the cryptocurrency wallet holding the coins.
The most common blockchain NFTs use Ethereum ERC-20 tokens. The ERC-20 token is what the blockchain uses to issue a smart contract on the Ethereum blockchain. Tokens can also be purchased with Polygon, Solana, and Polkadot cryptocurrency.
NFTs have opened up a new door for artists, companies, and celebrities to monetize their assets. Artists are able to create a library of digital assets to market to a new wave of investors and collectors. Celebrities are creating assets that capitalized on their celebrity brand identity. Some NFTs are selling for thousands, even millions of dollars.
WHY AM I DOING NFT
Nothing more than just a hobby! I mean, who doesn't like pretty things? It is loveable and it will increase your vibration or energy right away.
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