Table of Contents
- Introduction
- What is an NFT
- How does NFT works?
- Examples of NFT
- Common NFT questions
Introduction
The goal of this article is to explain NFT in a simple and understandable way and also to take a swing at answering some common NFT questions. So ride along…….
For starters, we can simply say an NFT is a digital asset. To simplify the analogy, just think of it as a digital trading card or a painting.
Or better still, imagine buying a piece of digital artwork on the Internet at a reasonable price and getting a unique digital token that proves your authority over the artwork you bought just like a certificate of ownership. Wouldn't it be great? Well, that opportunity exists now, thanks to NFTs.
NFTs are currently taking the digital art and collectibles world by storm. Just as everyone worldwide believed Bitcoin was the digital answer to currency, NFTs are now pitched as the digital answer to collectibles. As a result, digital artists are seeing their lives changing thanks to the massive sales to a new crypto audience.
If you are interested in NFTs and want to explore more about what they are, you have come to the right place. Let’s dive in and see what all the fuss is about.
What is an NFT?
NFT means non-fungible tokens (NFTs), Non-fungible means it can’t be changed, you can’t split it up and it must be distinguishable from something else unlike Bitcoin where one Bitcoin is the same Bitcoin somewhere else.
NFTs are a digital asset that represents real-world objects like art, music, in-game items, and videos. They are generally created using the same type of programming used for cryptocurrencies. In simple terms, these cryptographic assets are based on blockchain technology. They cannot be exchanged or traded equivalently like other cryptographic assets.
It is also noteworthy to mention that, when you are buying an NFT you are basically buying the right to that asset. With NFT it’s just like owning a valuable piece of data. All together an NFT is a token that you own, that doesn’t change throughout time.
How does an NFT work?
Haven understood what NFT is let’s also look at how it works. NFTs exist on a blockchain, which is a distributed public ledger that records transactions. You’re probably most familiar with blockchain as the underlying process that makes cryptocurrencies possible.
Specifically, NFTs are typically held on the Ethereum blockchain, although other blockchains support them as well. An NFT is created, or “minted” from digital objects that represent both tangible and intangible items, including:
- Graphic art
- GIFs
- Videos and sports highlights
- Collectibles
- Virtual avatars and video game skins
- Designer sneakers
- Music
You might be asking your self “Anyone can view the same NFT image or even the entire collage of images online for free. So why are people willing to spend millions on something they could easily screenshot or download?”
The answer is that an NFT allows the buyer to own the original item. Not only that, it contains built-in authentication, which serves as proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.
Before you buy an NFT ask these questions?
- First of : Is the NFT item first of its kind?
- Utility: Does it have real-world benefits? (In the nearest future, creators would sell NFT for community access or a monthly lunch meeting)
- Unique or rare: Is it unique and one of its kind?
- Ownership history: Is it owned by someone important or special?
Question: Does buying Jack Dorsey's first tweet check out on all the 4 boxes? You answer that.
11 Most Valuable NFTs
Here’s a list of 11 most valuable NFTs and the prices they were sold for.
- Cryptopunk 6965: 800 ETH
- Cryptopunk 4156: 650 ETH
- Crypto 2890: 605 ETH
- Dragon Cryptokitties: 600 ETH
- Cryptopunk 6487: 550 ETH
- Decentraland 514 ETH
- HashMask 9939: 420 ETH
- F1 Delta Time: 415 ETH
- Cryptopunk 2140: 400 ETH
- Decentraland: 345 ETH
- NyanCat: 300 ETH
Can someone copy your NFT?
Yes: Someone can copy your NFT just like any other artwork but the original NFT address can be traced to the original creator since all NFTs have their log of the transaction history. So even though it can be copied by others, you alone own the original copy. Remember, the value in an NFT is not the image per se it’s in the specific piece of data that you own.
Most commonly used NFT Exchanges
- Opensea
- Axie Marketplace
- Rarible 4.Superrare
- Larva labs/ Cryptopunks
- Nifty Gateway
Where do you store your NFT?
You save it in a wallet where it can be safe and accessible. Here’s a list of online apps that host wallets as a service.
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