What is an NFT? Not familiar with what an NFT is? Learn the basics with this edition of our Crypto101 series!
What is an NFT?
Not familiar with what an NFT is? Learn the basics with this edition of our Crypto101 series!
Fungible vs Non-Fungible…What’s the difference?
It is essential to understand the notion of 'non-fungibility' before exploring non-fungible tokens (NFTs). Fungible items can be exchanged for identical versions, like a dollar bill. Non-fungible items are distinct and valuable on their own; two cars of the same make and model may have different values due to differences in features and prior ownership.
What’s the benefit of NFTs? How do they actually work?
NFTs use blockchain technology, where records are stored publicly on networks distributed across multiple users' computers - meaning that no single company possesses it. This decentralization ensures immutability and allows operators to earn money. The blockchain records detailed history and enables authentication. For example, when buying an artwork, you can see all prior owners right back to the creator's initial production and thus be assured it is an authentic piece. NFTs provide a secure alternative to paper certificates of authenticity which often get forgotten or destroyed.
The impact or NFT technology
NFT technology has the potential to revolutionize digital items by introducing scarce, openly transferable, and authenticated ownership. This new technology is incredibly powerful for creators, as they can sell unique and authenticated items without relying on traditional platforms. In addition to initial sales, NFT creators may earn income from secondary sales. For example, a developer could create an in-game skin that can be used across multiple games and has been verified as authentic and owned by the creator. Collectors will also benefit from this technology, as they can trust the authenticity of an item before purchase without relying on a reseller’s word. Alongside having access to offerings they may have been excluded from in web2 for a variety of reasons.
What are NFTs being used for today?
NFTs are being used for a variety of purposes, including representing anything imaginable. The future looks promising for this innovative technology, and there are many implementations yet to be seen.
Art
Regardless of skill level, many artists have been creating collections and individual pieces using NFT technology. Allowing their work to reach audiences worldwide.
Profile pictures (PFPs)
Profile picture projects have become the most popular genre of NFTs. BAYC, Lazy Lions, World of Women are just a few of many recognizable collections which have become popular for social media users to don as their profile pictures.
Collectibles
From sports memorabilia to famous celebrities collectibles, the NFT realm has become a hot spot for coveted collector items. Many projects will even send you a physical copy of the item, with the NFT acting as a receipt of authentication on top of receipt of purchase.
Domain names
One of the fastest growing sectors of NFTs; Domain names are being seen as a key competent to mass adoption and technical development of cryptocurrency. From personalization and customization of wallets to legitimate decentralized domain resolving;The future is bright for the blockchain tech being developed which is represented by these NFTs
Ticketing and membership
Entertainment events have capitalized on NFTs by offering exclusive tickets and passes to consumers in digitized form. Its created a simple, easy to use purchase method which functions the same as online ticket ordering. Big time events such as Coachella have been seen using the technology for their recent events.
Gaming
Play to earn gaming has become a hit over the last few years.Many of these gaming projects. Use NFTs to represent different attributes or skills of players within games, or to offer other in game features that enhance gameplay. The ways NFTs can be integrated into the gaming community are honestly endless.
Virtual worlds
Many have heard the buzz about digital real estate in the metaverse, but theres a lot more to these virtual world projects than just that. Otherside, Decentraland, Sandbox and others are developing full scale digital worlds for users to use and interact in!
Future applications
New uses for NFTs are always coming about. Innovation and creativity have pushed the technology incredibly far, incredibly quickly. There’s no doubt that the sector will continue to grow and evolve alongside cryptocurrency and mass adoption.
How to buy and sell NFTs
NFTs are becoming increasingly popular, and that’s been accompanied by the rise of multiple marketplaces which look to capitalize off brokerage fees. Most NFTs marketplaces now support multi different blockchains while providing different perks to incentivize consumers. Currently OpenSea is the largest platform; but recent marketing strategies pertaining to creator fees and royalties have led to MagicEden, Blur, and others gaining notoriety. As always be careful and diligent in making purchases and always do your research regardless of which marketplace you use.
