Being an active internet user, I have heard a lot about the word NFT for the past several days. After all, what is this thing that has swayed in the internet world? This curiosity inspired me to investigate more about NFTs. So, I watched some videos, read some articles on the internet, and visited the NFT market platform to get in-depth info about it. And eventually, I managed to collect some valuable information, which I am going to share now.
Understanding the Meaning of NFT
“Non-Fungible Tokens” is the expanded form of this hype. Anything that cannot be replaced or is only one of its kind is known as “Non-Fungible.” Let’s take the example of the portrait painting of the Mona Lisa; it is a unique creation by Italian artist Leonardo Da Vinci.
Can you paint another painting that exactly matches the painting of the Mona Lisa? Let’s say you are a great painter, and you can depict it, but can your painting match the level of the original painting of the Mona Lisa? Not at all because it is one of a kind and will remain so.
Now let’s talk about tokens; you and I are pretty familiar with this. It can simply be a piece of paper, metal, or anything that is sometimes used instead of money, but not everyone has it like money. If we understand it in a simple language, then with money, we can buy anything sellable, but with a token, we can buy only that thing for which the token is made.
What is the Concept Behind NFT?
We have just learned the meanings of ‘Non-Fungible’ and ‘Tokens’ in detail, and now we will know how NFT works. Well, to buy and sell all these one-of-a-kind digital pieces around the world, NFT was developed. So it’s a kind of digital asset; suppose you have digital art, and you create an NFT of that.
Then you will be assigned a digital token to certify that you are the owner of that particular asset. All these processes work through the ethereum blockchain technology. Likewise, Bitcoin and Litecoin, Ethereum is also a famous cryptocurrency, and an NFT can be bought and sold by using ethereum only.
What Types of NFT are There?
Well, there is no such type of NFT. However, you can create and sell most of the unique things that can be presented digitally, be it art, games, music, film, or any video.
How is NFT Traded?
Certain platforms have been developed to buy or sell NFTs, among which Rarible, Open-Sea, and Binance are popular, where buying and selling of NFTs are considered safe. Although buying or selling NFTs is different from a simple buy/sell. You must have a digital wallet to buy or sell NFTs, and this wallet can be accessed from Metamask, a free internet browser extension.
Now let’s say you are buying an NFT of a painting. Will you get that original piece of painting? No, you will receive a certificate of NFT instead, which will be linked to blockchain technology and ensure that you are now the owner of the NFT of that painting.
But, can you purchase an NFT with currencies like USD, EURO, or INR? Nope, Here any NFT you want to buy, a certain price is marked below it, and you need to have the same value of Ethereum in your wallet to buy that NFT. This implies that the currency suitable for buying and selling NFTs is Ethereum.
Top 3 NFTs Sold So Far
- Pak’s The Merge: $91.8 Million
This was the most expensive NFT to be sold, it was sold on 2nd December 2021.
- Everydays: The First 5000 Days: $69.3 Million
This was the second masterpiece NFT sold by Beeple, Let’s not forget Beeple’s crossroad NFT was also on-trend before. He is surely ruling the NFT market.
- Beeple’s Human One: $29 Million
Human One was also created by Beeple, which was sold on 9th November 2021 at a whopping amount of 29 Million USD.
What Do I Feel About NFTs?
Obviously, it is a unique discovery that will revolutionize modern finance systems. You will probably be astonished by looking at the amount the NFTs are being sold, but, If I share my views on it, NFT is very useful and fun for those fond of art. For them, this can be a good source of passive income too.
But if you are not a fan of the arts and want to use NFTs as a future investment, then I think it is too early now. Because you may buy an NFT in the hope that you will sell it for a higher price, and there is a probability that you may be left with no buyer, your money can be wasted in this way.
Another case may also happen that the wallet in which you have bought the NFT, that platform goes out of business. You can not access the token anymore in this case. Since NFT is a decentralized digital asset, i.e., no one is behind all these transactions. You are solely responsible for it.
Last but not least, if you are eager to know more about NFTs and want to know how all these platforms work. Then, if possible, I would suggest you try to create your own NFT and sell it, or you can invest a small amount, let’s suppose 10$ in any NFT, and try to sell it. In this way, you will be more familiar with the concept of NFT.