NFT – what is it and how does it work?
Stands for “non-fungible token”. At present, it does not have a fixed value, although this may change in the future. NFT is a digital content linked to a blockchain (database) on which cryptocurrencies are also based. However, unlike NFT, these are interchangeable. Simply put, this means that each Bitcoin has the same value as another Bitcoin. In the case of NFT, each token has its own value.
A non-fungible token is nothing more than “0” and “1” arranged in any form in a unique string. Each one is certified with a certificate of authenticity, which means it is special and unique. A social media post, avatar, a picture, an animation or even an emotion can be saved as an NFT. The problem is, no one can own the same thing. One exception is if we sell a “thing”, we lose ownership to the purchaser.
Such a token can also serve in a way as an “entry ticket” through which we become part of a community or a group of people. Such persons can identify themselves by the characteristic images on their social media profile pictures. The price of this type of NFT, and others, is entirely determined by the market. It can cost a dollar or even several million. Twitter is already working on security and authorization systems. It will be able to check if we are the owner of a particular NFT (in this case, for example, the image we want to put on a profile image). After successful verification, a symbol appears next to our photo confirming the authenticity and ownership of the used NFT.
How to buy NFT?
Tokens can be purchased at the appropriate exchanges. To become an owner, you need to select the market from which you want to buy the NFT and choose the digital wallet that is required to make the trade. You must also select the cryptocurrency you pay for it. Currently, NFT is sold primarily for Ethereum (ETH). Part of the stock exchange also charges an additional gas fee. Theoretically, it should compensate for the greenhouse gases emitted into the atmosphere that accompany every Ethereum operation. This amount may be up to several hundred dollars.
When buying an NFT you have to pay attention to the purchase agreement. You can purchase the token with all usage rights (commercial, reproduce, use, etc.). You can also only acquire the right to a copy of a particular “thing”. This could be compared to buying a pack of limited Lego set that were only released 1,000 pieces.
Selling NFT on stock exchanges is about uploading your content and adding the necessary information to turn it into a virtual token. The description of the selling property and the recommended price are also an essential element. Then the Exchange creates a token by converting the digital creation into a token by storing information in the blockchain.
NFT is gaining in popularity day by day. It is undoubtedly an interesting way to sell digital artworks such as photos, graphics, animations, 3D models and other media. It was loud about it when American digital artist Beeple sold his creations for more than 270 million euros. It should be noted that this is still a period of speculation and market research. The NFT developers are currently producing the demand and the limited resources to meet it. A collage made of from the Beeple works you can see below.
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