Non-fungible Token or called NFT is now the trend that is shifting nearly every sector there is in the world. They are transforming everything from finance to even art! We can see that the trend will not stop any sooner until every corner is touched by NFT.
If you think and feel that it is not possible then please know that it is not so. It is indeed very much possible.
Over the last few years, we can see that NFT is making very significant changes and is now in new innovations in Tech, Finance, Fashion, Sports and Arts. Ever since 2021, NFT is already involved in hype, confusion and also dramas. It also has its place on Cultural phenomena.
If you are new to the Crypto world and Digital assets then it can be difficult for you and you may not be able to understand what is actually happening, but do not fret because we are here to help you understand! Here is a crash course for you to help you learn how to in the simplest way possible. We will talk about What NFTs are. How they’re made, and various other benefits and how you can judge whether or not it is right for you!
And if you still have questions yet to be answered then you can always hit us up with a message.
What Is NFT?
NFT is a Non-fungible Token and it is a unique unit of data that is put into a blockchain hence it can be linked to digital and physical objects as proof of ownership.
The things that can be an NFT include Images, Songs, Videos, Avatars and more. But, they can also give the holder or owner special exclusive merchandise, tickets to either digital or physical events as well as to some physical things like cars or yachts and many more.
So, NFT allows individuals to create, buy,sell items in an easy verifiable way through blockchain. Bear in mind still, unless it is stated, you are not buying the copyright of that item or rights to property or commercial rights to any underlying assets when you purchase an NFT. Legal details can be very complicated hence we will dive into this later on.
When it comes to creating and selling NFTs, process is simple and here is how it works:
- Individuals or companies can select a unique asset to sell as an NFT.
- They can then add the item to a blockchain that supports formats of NFTs through a process called “Minting” which then creates the NFT.
- The NFT now represents that item on blockchain that can be proof of ownership in an unchangeable fixed record.
- The NFT then can be a private collection, or it can be bought, sold, traded using NFT platforms like markets or auctions.
What Is The Difference Between Crypto and NFT?
So just like the money that we have in our bank account, Crypto is what you will use as the middleman on trading which in turn means the transactions on the blockchain. Crypto can be purchased or converted into real world physical money like dollars or euros and more just like playing with currencies from Dollars and Euros. In contrast, NFT is an asset that is purchased by using crypto as currencies. It can gain or lose value based on the currency that you buy it on just like popular trading of cards and arts.
In this way of explaining, NFTs are non-fungible items and cryptos are fungible.
To then better understand this is to put it in the perspective of our real currencies. If we were to be asked by others to borrow money from us then we won’t say which dollar do you want? Because the 1 dollar is carrying the same value as any other 1 dollar there is out there because as currencies of a country that 1 dollar is a fungible item and it is the same thing on Cryptocurrencies. It carried the same weight as its own making it a fungible thing. Hence it can be traded and replaced.
NFTs are non-fungible and this means that no two NFTs are the same. Each of the NFT is a unique item of its data and cannot be replaced by another so-called identical item because there is no identical item out there. Hence, NFTs are unique and the rarity increases their appeal and wants on others. So that means that this uniqueness of that item now becomes a Unique Selling Point for others to want the NFT you are holding.
Why Own NFTs?
The demand for NFT has spiked recently although there are many who are skeptical. At the end of everything we know it as a digital file so how is it different from having the screenshot on our phones different from owning an expensive and unique NFT? Does that proof of ownership when being a holder of NFT mean anything at all? To help you to decide whether you should own an NFT, here are some reasons as to why.
It Empowers Artists
Publishers, Producers and more often force artists into signing contracts with them and still they may not serve their interest in the contracts. But with NFT, an artist can mint and sell their work as for himself. This means that it allows them to maintain their own ownership of their work and can earn royalties and sales and all this is for himself.
This will give creators a real fair model and bypass the people that controls their work and by having NFT it will support the creators as well as financially to let them continue what they love to do.
To make a 1952 Mickey Mantle rookie card is only 5 cents but can be sold for 5.2 million dollars. How is that possible? Because of the history and rarity of that item. It is the culture and history that makes money. NFT then in many ways in the digital format of this sort. For those who want to make and build their own digital asset, NFT gives you the opportunity that has not existed outside in the traditional world of collectibles.
It Is An Investment
Some of the NFT holders only want to make it as an investment because of its value and how in the future this value will go up. Hence one day it will become a treasure for the collectors. Like art we know today, there will always be a name that is put together with the art. For example, Mike Winkelmann, a digital artist, he sold his Everydays: The first 500 days at Christie’s for 69 Million dollars in March 2021.
It can be confusing to you because everyone can see and interact with the image but we have said before that there will ultimately only be one holder or owner of that NFT. For some yet this is not enough but a market makes NFT investment very high risk and can potentially make major losses.
NFT ownership can also come with social benefits. Because we can see that many artists and creators have turned their NFT projects into very strongly knit communities! A clear example is the Bored Ape Yacht Club. It has the strongest and vibrant community in the NFT space. Collectors of the Bored Apes can get access to members-only discord channels and very exclusive merchandise and have a say in the future projects and many more benefits all included. So for many it is how they socialise with friends and their identity when owning an NFT.