NFT (Non Fungible Tokens)-Explained

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NFTs, Non-Fungible Tokens have been around us for a few years, but it all got hyped up in 2021. And in the race of accepting blockchain-powered non-fungible tokens, India is not far behind. This NFT trend is getting enough attraction in India also. Various actors, singers, and sports stars are rolling out their NFTs, which is creating enough buzz in the Indians to know more about NFTs and understand how they work, are they safe or not? Where and how to buy them?

Table of Contents

* What is an NFT?

Non-fungible tokens (NFTs) are a digital asset on a blockchain that represents real-world objects like art, music, collectibles, in-game items, and videos. These assets are bought and sold online with the help of Cryptocurrencies.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin.

But NFTs are different. Every NFT is unique in its creative design and cannot be duplicated, making them limited and rare. Each has unique identification codes and metadata that distinguish them from each other making it impossible for NFTs to be exchanged for or equal to one another, hence called Non-Fungible.

The current marketplace of NFTs revolves around collectibles, such as digital artwork, sports cards, and rarities.

* How do NFTs work?

Almost all NFTs are part of the Ethereum blockchain. Ethereum is also a cryptocurrency just like other cryptocurrencies but its blockchain supports these NFTs as it stores extra information.

Essentially, NFTs are like physical collector’s items but only digitally. So instead of getting an actual artwork to hang on the wall, the buyer gets a digital file instead. NFTs can actually be anything digital (such as artwork, music, GIFs, etc turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.

NFTs can also work to remove intermediaries and connect artists with audiences or for identity management. NFTs can remove intermediaries, simplify transactions, and create new markets.

For an artist, it gives a way to sell work that there otherwise might not be much of a market for. And as NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit, in this way serve a purpose to collectors to buy these NFTs.

* What if someone simply downloads that same NFT for which someone just paid millions?

Just like Bitcoin, NFTs also contain ownership details for easy identification and transfer between token holders. Owners can also add metadata or attributes pertaining to the asset in NFTs.

Other people may be able to make copies of the image, video, or digital item that you own when you buy an NFT but they will not have the ownership of the work.

Here are a few examples of people selling their artwork or personal digital asset as NFTs which you may have heard about:

Digital artist Beeple sold “Everydays — the First 5000 Days” for $69.3 million through a Christie’s auction.
A 20-second video clip of LeBron James “Cosmic Dunk #29” was sold for $208,000.

A CryptoPunk NFT sold for $1.8 million at Sotheby’s first curated NFT sale.
Twitter CEO Jack Dorsey auctions an NFT of his first tweet, which sells for $2.9 million.

* How Can I Buy NFTs

To buy an NFT you need to purchase some cryptocurrency depending on which cryptocurrencies your NFT provider accepts. To buy and store these cryptocurrencies you need to get a digital wallet. This wallet will let you store both cryptocurrencies as well as NFTs. You can buy these cryptocurrencies from exchanges like Binance, Coinbase, etc, and then you can transfer these cryptocurrencies to any wallet of your choice.

Once your wallet is set up and funded with cryptocurrencies you can buy your favorite NFTs.

There are various marketplaces where you can start buying and selling your NFTs like Beyondlife, Foundation, Rarible, WazirX, Colexion, BuyUCoin, Jupiter Meta, etc. Although these marketplaces are host to thousands of NFT creators as well as collectors but you must do a careful research before getting into them.

* Should You Buy NFTs?

Just because there is this hype around you about NFTs doesn’t mean you need to buy one. Yes, they are safe but they also come with a lot of risks. Many people have made a lot of money through these NFTs while many lost a lot of money for buying a digital asset which ends up being worthless. Thus there’s no guarantee that the value of each NFT will increase, some may sell for thousands or millions of dollars while others may remain or become worthless.

Also, this industry is all new and no one has that much knowledge about everything so there are a lot of fraudsters and scammers out there to take advantage of your lack of knowledge.

So invest your hard-earned money in a particular NFT after proper research, don’t just follow the hype blindly and end up losing your bounty.

What is NFT?

Should You Buy NFTs?

ust because there is this hype around you about NFTs doesn’t mean you need to buy one. Yes, they are safe but they also come with a lot of risks. Many people have made a lot of money through these NFTs while many lost a lot of money for buying a digital asset which ends up being worthless. Thus there’s no guarantee that the value of each NFT will increase, some may sell for thousands or millions of dollars while others may remain or become worthless.

How Can I Buy NFTs

How do NFTs work?

Almost all NFTs are part of the Ethereum blockchain. Ethereum is also a cryptocurrency just like other cryptocurrencies but its blockchain supports these NFTs as it stores extra information.