Explaining NFTs: What You Need To Know About Non-Fungible Tokens

John Harper
Explaining NFTs: What You Need To Know About Non-Fungible Tokens

You might think that you know everything about cryptocurrencies and blockchain. Yet that is always wrong. A lot of things in the crypto world happened in 2017. You know some of them:

There happened one more thing that most people haven’t heard about. The world has gone mad about this thing in 2021. It is a non-fungible token or NFT.

What are NFTs? Why are they so popular, and how are they changing the World? How do they work, and how can you use them? Here is NFT explained, and you can get the answers to all these questions.

 What is NFT?

Non-fungible token. Do you need more explanation?

Okay, “non-fungible” means that this token is unique and can’t be copied or interchanged. For example, any fiat currency (Dollar, Euro) is fungible. It means that you can get 100$ and exchange them for Euro, getting the same sum in equivalent. Moreover, you can divide those 100$ into $20 five times, and you’ll still have those $100.

The same thing is for all common cryptocurrencies. Although they are digital and protected by a cryptocode, they are fungible.

You can’t make any of such operations with NFT. Somehow it is similar to Pokemon chips from the early 2000s. Of course, you could exchange it for the other chip or sell it for money, but you did not do the same thing.

So, you might think “They’ve just created digital chips? Bullshit.” The answer is no. They created a new protected environment for digital art. There is something more about non-fungible tokens meaning. You can’t create a copy of NFT, and you can’t replace it with something else. It is the same as the origin of Mona-Lisa. But it exists in the digital form.

How Does It Work?

Blockchain. Got it?

Okay, there is still something different. Firstly, there is nothing connected to NFT mining. So hold down your superpower ASIC miners and forget about them in terms of NFT.

Most of the NFTs are part of the Ethereum blockchain. As well as with other cryptocurrencies, it stores all the information about a token. The main part of this information defines that NFT works slightly differently, even from ETH coins. Let me give you an example.

Imagine that you created a digital picture and want to sell it for NFT. Thus, you put your picture on a suitable platform and set the price. Everyone who likes your picture pays this price and gets the origin of your NFT-picture.

In this case, you might say: “C’mon, I won’t buy a bad picture, I’ll just take a screenshot”. We need to say no again. Making a screenshot, you create a JPEG or PNG file, which is protected by nothing. Paying for NFT-picture, you buy a crypto code, which consists of:

For example, you can’t take a photo of the Mona Lisa in Louver, print it, and say that you have created this painting. Moreover, you can’t even make a copy and say that you are the only creator. There are several unique features of the original painting, and any art expert can define a copy.

Unique signature and digital information about the author are those features of NFT-picture.

The Opportunities of NFT

As we have mentioned, they created a protected digital environment for art. However, it doesn’t mean that you can sell only art with NFT. Actually, you can trade everything that could be represented in a digital way:

One of the most famous and curious occasions is when Jack Dorsey (Twitter Founder) sold his first tweet with NFT. You can go to Google and find more weird NFT-deals.

The main idea of creating the non-fungible tokens was to allow content creators, artists, designers, musicians, and others to monetize their wares and get the ideal safety guarantees.

Speaking about our example above, artists don’t have to find a gallery that will provide enough space for the exhibition and a guarantee that none of the paintings will be stolen. Instead, they can create such exhibitions online and sell the creations immediately.

In other words, the opportunities of NFT are only limited by your imagination. You can sell assignment writing with NFT. You can even provide help on essay writing with NFTs.

The world has gone mad about this type of token. It might be part of the future metaverse, where all of us will live.

 Other Opportunities

As you may have guessed, you can be a trader with NFT. For example, imagine that you have bought a small GIF for 10$. Within several months this GIF became very popular since a celebrity (e.g., Eminem) bought it for 10000$. Thus, its price has risen several times. Now, you can sell your exemplar for this price.

A lot of people started to trade NFTs in this way. The most difficult thing about it is that you almost can’t predict the digital creations that will rise in price soon. It mostly depends on your luck.

How to Create NFT?

If you are an artist or you have an interesting idea to sell something online, you can create NFT individually. In this case, you have to choose a blockchain that supports NFTs, upload your piece of art and set the price.

You can add the information about the fee for your NFT, and also, you can add the signature. At the same time, you can add any other information that will define your NFT as unique. The blockchain platform will encrypt all of this data automatically.

How to Buy NFT?

So, if you want to enter the metaverse with goodies and impressive collections, you need several things to start.

Firstly, you need a digital wallet. You can create it on a cryptocurrency exchange platform, download a desktop or mobile application. There are also some versions of Web cryptocurrency wallets.

Secondly, which is obvious, you need to buy a cryptocurrency. Mind that you need the same crypto as indicated for NFT that you want to buy. To buy crypto, you have to go to platforms like Kraken, Binance, Coinbase, etc. You can also buy them from real people, but such deals are risky.

If you already have some crypto on your wallet, you might just exchange it for an appropriate coin that the NFT provider accepts.

As soon as you have done all these operations, you might go to the NFT marketplace, choose the preferred picture, music (or anything that you have chosen) and buy your first NFT.

The reasonable question is where to buy NFT. Since these tokens became very popular and a lot of celebrities use them, there are a lot of marketplaces with different NFTs. The largest platforms are:

There are a lot of other NFT marketplaces on the Web. You can surf them and use any that you like. Yet, as well as with the cryptocurrency market places you have to be careful since there are many scam sites.

Why is NFT Controversial?

The main reason is that NFT is just another cryptocurrency. A lot of people still don’t believe that cryptocurrencies aren’t a kind of bubble. However, this bubble is real and it has a huge capitalization.

The second problem is that cryptocurrencies harm the real environment. They need a lot of energy to work since cryptocurrencies (including NFT) are based on computing powers. Thus, a lot of activists are worried about the harmful impact of NFT’s popularity.

That is why non-fungible tokens might be prohibited at one moment. However, today these tokens are widespread, and it needs a lot of time to stop the world from using them.

Is NFT Worth Buying?

Why not? First of all, mind that you have such an opportunity, so why don’t you try it?

Explanation. NFTs are very risky since nowadays, this sphere is still very fresh, and the future is uncertain. The experts have separated into two groups. One of them says that it is the future of the whole art, and all the artists will use these tokens to sell wares. The other group says that it is a new kind of bubble.

The reality is that NFT was something strange like Bitcoin several years ago. Bitcoin and its forks are backed up by nothing except people’s belief in crypto. This belief made the whole cryptocurrency market a powerful machine that could even replace fiat currency.

NFTs have a strong mission. They really help a lot of creators and even help independent artists to start their careers. With NFT, an independent artist has the best guarantee that no one will steal his work before it becomes world-famous.

Thus, firstly you have to understand the NFT market. It is necessary to live in the modern world like it is necessary to know an essay format when you have to cope with an academic assignment.

Secondly, you should try to buy some NFTs to understand the process. If these tokens become more popular, you might even ask someone to write my essay for me and pay with NFT. Moreover, you can sell any NFT at any time, so you won’t lose anything.

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