NFT: Non-Fungible Tokens Explained

NFT: Non-Fungible Tokens Explained

👋🏾 Sanjay Here, guess what? NFTs are like Bitcoin with less hype. However, while Bitcoin continues to evolve as a global currency and payment network, NFTs have become more commonplace. They have become more convenient for everyday use in daily life, and their popularity has grown alongside their usage in cryptocurrency.

NFTs have gained a lot of attention lately for being the ""next big thing"" in cryptocurrencies — paving the way for broader acceptance, increasing widespread use, and further increasing the value/demand for these assets. These assets are backed by things like land, art, gold, intellectual property & more.

Hmm, What is NFT (Non-Fungible Tokens) 🤔?

NFTs are like Bitcoin with less hype. However, while Bitcoin continues to evolve as a global currency and payment network, NFTs have become more commonplace. They have become more convenient for everyday use in daily life, and their popularity has grown alongside their usage in cryptocurrency.

Typically they're bought and sold by entities that can afford to acquire them. They give entities who own them a legal way to transfer their ownership into other hands, without needing to physically touch in any way. Buying and selling these assets has become very popular due to their perceived usefulness in modern society and the fact that virtually nothing that can be uploaded to the internet can be wiped out by a hacker.

They allow you to increase the liquidity of your asset pool significantly. For example, you can buy a house using Bitcoin and resell it to other people on an NFT as if it were their real property. You can do precisely the same thing with art, making it transferable from one person to another without a middleman. This has allowed artists to begin selling their work directly to people worldwide without worrying about traditional intermediaries like middlemen, brokers, or banks. The only thing you need for this to work is Bitcoin, which is already widely used and widely accepted by all countries.

Non-Fungible Tokens Creative (ART) 🎨

Art is an essential part of the cryptocurrency world, and it isn't likely going anywhere. People are starting to collect their favorite pieces of art and hang them on their walls or in their homes. NFTs are an easy way for people to earn a fantastic profit without actually putting any work into it.

How to Buy NFTs (Non-Fungible Tokens)

If you've never used cryptocurrency, it can be confusing. A cryptocurrency is a digital form of currency that can be specifically programmed to perform a specific function, such as payments, storing value, or even gambling. It operates on a decentralized network without any central authority. Bitcoin integrates many of the functions of a regular online wallet, including sending and receiving funds and creating new addresses for transacting with digital assets. However, unlike traditional wallets that rely on communication with a centralized service to convert Bitcoin into a virtual form, cryptocurrency wallets run directly on the Blockchain—a public ledger of transactions.

NFTs Marketplaces

  • OpenSea
  • BakerySwap
  • Nifty Gateway
  • Super Rare
  • MakersPlace
  • Foundation

One of the biggest concerns for new token buyers is the exchange rate. These days, a lot of token sales use the ERC-721 token verification standard that relies on a trusted setup of an exchange. Many exchanges fail to adhere to this standard and can be hacked, resulting in token values being stolen or lost. 

How do NFTs work? ⚙️

NFTs can be anything from a game to a shop, a social network, to an educational app. They are an open system that relies on cryptography to keep track of your purchases. The Blockchain keeps track of what's really going on: who bought what, when, for how much, and with what ID credentials. From there, you can quickly transfer your tokens to other platforms or exchange them for tangible assets.

  1.  Wait for a sale and
  2. Wait until someone else buys your NFT. Sellers offer various NFT types for sale, such as game coins, tokens, in-game currency, etc. They also have different timelines when they want their NFT coins or market price to be reached. You have to decide how much you're willing to spend and then wait for someone to buy it. You can't just visit a seller, as they might have locked their site with a 'buy' button, or they could be offline, which might mean they won't respond right away.

Are NFTs a suitable investment for you? 📈

People are often surprised by how much digital art is worth. In reality, many digital artworks are worth significantly less than their traditional counterparts. For example, a signed original Picasso (aka 'The Blue Hour') could sell for more than $150,000 on the low end and more than $45 million on the high end. The reason? It's one of the most expensive pieces in the world! Even if you could somehow get your hands on a signed Picasso (even if it were for free), there are very few artists that would agree to sign their work for free; in fact, most artists would demand a commission based on the value of their work— even if it meant giving up their livelihoods.

One of the hardest things about owning digital artworks is that they're so duplicated. Every GIF, every shared photo, and video has a direct counterpart online, someone somewhere using Photoshop to stamp a specific design onto the canvas. If someone offered to give you cash for these creations, would you sell them?

Conclusion

Investing in NFTs has the potential to be profitable. The idea that you can somehow earn money from stocks, bonds, and other assets is fundamentally incorrect. It's possible you could make money investing in non-fungible tokens, but the risk is that you won't be able to hold these tokens, and they'll be worthless when the time comes to exchange them for goods and services. Ultimately your money is on the other side of an exchange which takes a fee for serving clients -- usually a percentage of the value of the token traded (this can also be negotiated).

If you've been paying attention to cryptocurrency news lately, you might have heard of an exciting new investment vehicle called a ""NFT."" The name is a portmanteau of the words ""non-fungible"", and ""real-world"". This great new type of cryptocurrency is based on an entirely new construct and isn't issued by a central bank. Instead, it's created using complex mathematical algorithms by an entirely separate community of coders, who are rewarded for contributing their time and expertise. At the end of the day, the choice is yours. 

Let's get sh*t done, together!

If you are an entrepreneur, we're here to help you launch your ideas to the world. Get the advice you need to start, learn, build, and grow your business today.  Subscribe here for free access to our library of resources.