So what exactly are NFTs? Are they worth investing in, as some experts have said? And what’s the catch? There’s a lot of research to do in this growing space, but here’s some information to get you started.
What is a non-fungible token (NFT)?
NFTs are digital assets that represent real-world objects and memorabilia such as art, music, in-game items, and videos. Even though NFTs have been in existence since 2014, they are still catching fire as an innovative way to buy and sell popular artwork. Because they exist on a blockchain, each NFT is authentically unique as to where their value comes from (we’ll talk about this later).
Some people may get confused between NFT and cryptocurrency; After all, both are digital assets that rely on blockchain technology. But any cryptocurrency only has one price at any given time, so you can exchange any two units of bitcoin, for example, and still end up with the same price. Meanwhile, each NFT is uniquely identifiable, and its value depends entirely on how much one is willing to pay for it, so it is impossible to swap two NFTs in the same way.
What do you get when you buy NFTs?
The main game-changing aspect of NFTs is the fact that they have unique certificates of ownership associated with the original item. In addition, there is a record of who owns the NFTs on the Ethereum blockchain, which is a shared, immutable digital ledger.
That doesn’t mean other people can’t see or share it, though. The official owner of Beeple’s Everydays: The First 5000 Days is Vignesh Sundaresan, who founded the MetaParse NFT project and bitcoin ATM provider, BitAccess. But the image has been viewed, shared and copied millions of times by people around the world. Still, none of those other people can claim to be the real McCoy until Sundarson decides to let it go.