What is an NFT?

In case you’ve been reading in regards to the cryptocurrency world, you’ve probably heard of something called an NFT and the way the market surrounding these tokens is taking off. However what exactly is an NFT? And why would anybody buy one?

What’s an NFT?

The letters NFT are an abbreviation, and so they stand for non-fungible token. The word non-fungible basically means ‘not changeable’ and thus, a non-fungible token is a token which is not exchangeable on a one to 1 basis.

This doesn’t mean that one cannot trade an NFT for cash, it just simply signifies that there is no such thing as a universal value which one can peg to every NFT. Every NFT will have a price which is unique to it, and its buyer. Think of NFTs as the fine art of the cryptocurrency world. Just as the worth of a painting changes primarily based on when, the place, and to who it is sold to, NFTs are also able to vary worth based on totally different circumstances. Besides just digital paintings, NFTs will also be music, videos, and even tweets from sites like Twitter.

Where are NFTs Found?

As mentioned above, NFTs are basically digital art. This means you’ll discover them in on-line marketplaces for digital art. But this isn’t the only place you could find NFTs, as they can typically be found in the video gaming world. This is because, within the modern day, there are a number of upgrades, resembling outfits and weapons, which you should purchase to your digital characters in a number of video games. These outfits and weapons are NFTs.

Who Can Make an NFT?

NFTs are constructed on various blockchains equivalent to Ethereum and Tezos. This means anyone who has access to an NFT creation platform, and has a small amount of ETH or XTZ, can create an NFT. An example is the artist Grimes, who created a bunch of NFTs in the form of unique digital renderings, and sold them in a web based public sale in February 2021 for over $6 million.

Conclusion

So what have we learned? In short, Non-Fungible Tokens represent distinctive items of digital property that are secured by a blockchain. They draw value from association to an artist, the scarce communities they reside in, as well as the creative qualities they could contain.

These items of digital property may be just about anything you need them to be, as long as you might have the rights to the creation. Plus, they seem to be a cornerstone technology for the digital future fast approaching.

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