NFT’s, as known as non-fungible tokens, are a kind of crypto-asset where each piece is unique. Unlike fungible currency, like Bitcoin and dollar bills that have the same value for each coin, NFT’s can have a wide value range from one coin to another.
Because of how unique NFT’s are, they are able to be used to authenticate ownership of digital assets like artworks which cannot be done using other crypto like Bitcoin and Ethereum. In essence, NFT’s are digital assets with value that prove your ownership of that item.
NFT’s carry a large importance, even though its development has only been recent. Currently, this technology is being used to trade anything from virtual NBA trading cards to original memes and virtual real estate in Decentraland. However, one thing that stands out about owning an NFT is that no physical goods are interchanged between traders. The buyers only receive the ownership of the image or asset virtually. This has raised a lot of questions about what the benefits of NFT’s really are.
Why would a customer spend possibly millions of dollars on a virtual product? Also, since the product is virtual, wouldn’t it be easy to make many copies of the product, hence decreasing its value?
A collector who sold an NFT for $6.6 million was interviewed by Coinbase, a company specialized in trading virtual currencies and crypto, made an analogy as to why NFT’s hold value despite being able to make copies of the image. What gives the products value is not the image its self, but the history behind it. If someone were to take an image of the Mona Lisa, for example, the picture of the artwork doesn’t make it worth millions. It’s the original piece, with the history and age behind, that gives it its value.
With the verification of blockchain (we have another blog that goes into further detail about blockchain), the authenticity and history of trade behind an NFT can be tracked by buyers to verify ownership and authenticity.
If you are interested in getting into the community of NFT’s, how do you purchase and sell the currency? Unlike other forms of crypto, where consumers can trade currency via a virtual wallet, NFT’s are primarily traded on specialized market places.
Such places include: ZORA, Rarible, Opensea, and more. As the technology becomes more advanced, NFT’s will be more readily available to the public. Even video games are beginning to adopt the NFT technology to trade online weapons and skins for players to customize their character or gameplay.
With the inclusion of computers in everyday life, technology has enabled people to unite and create their own vision of the future. With the development of virtual currency and art, users are able to trade and purchase digital items as if it was real life. People are even able to purchase virtual real estate to display their property.
Even if you are not interested in a virtual life, crypto and NFT’s are available to be traded by anyone as long as you have access to the internet. In fact, most of the people trading crypto are hopes of earning money, hoping that they’ll get lucky and buy a currency at the right time to see a massive margin of earnings.
NFT’s are an interesting technology, and with a little luck, they allow anyone to create the next valuable item or have ownership of a valuable piece and resell for much more than what they bought it for.