NFTs are now more and more frequently featured on the news. They are associated with big money and advanced technology, but what exactly are NFTs and how can they be of use to people? Here is everything you need to know about NFTs and how they work.
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1. What are NFTs?
NFTs, or non-fungible tokens, are a form of cryptocurrency that also has collectable value. NFTs are closely connected to cryptocurrencies such as Bitcoin or Ethereum. However, those cryptocurrencies are fungible, which means they can be exchanged for another currency. NFTs being non-fungible means they are completely unique and cannot be exchanged. Each piece of NFT is one of its kind, and that is what makes them so valuable.
2. Where are NFTs used?
If you’ve already heard about NFTs, chances are you heard about them in connection to art. It’s true, most of the NFTs created today revolve around various forms of art. Bands release their new music albums as NFTs available to a small number of collectors, artists sell digital artwork and even GIFs, and just this week, Jack Dorsey, the founder of Twitter sold his first-ever tweet as an NFT for a whopping $2.9 million. In theory, anyone can create artwork and sell it as an NFT, but the artwork needs to have value in order to find a buyer through blockchain technology.
3. How do NFTs work?
NFTs function as part of the Ethereum cryptocurrency network. Each NFT is a token with unique information stored in it. Even if an NFT is a digital image or a GIF, you can’t just download it from the internet and still think of it as an NFT. It will be nothing more than a digital file because the unique blockchain information will be missing from it.
Still, not all NFTs come in a single unit. NFTs can be successfully copied and distributed multiple times while still containing the information that gives it value. For example, there are multiple copies of the NFT music albums available. However, the copies have less value than an artwork that is completely original and one-of-a-kind.
4. How to buy NFTs
Right now, NFTs are in high demand, but they are still available to any buyer who has the means and the desire to own one. If you want to own an NFT, you will need a wallet on a specific platform where NFTs are sold, as well as the necessary amount of cryptocurrency to put in that wallet. Then you simply transfer the required amount of cryptocurrency and receive a unique NFT in return.
Read more: How To Start A Currency Trading Business
NFTs are available from multiple platforms. Some of them sell only a specific type of NFTs, but others, such as Nifty Gateway and NFT ShowRoom sell a wide variety of NFTs for any budget and taste. You can even buy and sell NFTs in some video games that can take the form of in-game purchases such as skins and amunition.
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