NFTs are driving a paradigm shift in practically every aspect of society. They’re changing everything from arts to economics, and there’s reason to believe that nearly every aspect of society will be affected.
If you think that’s a bit of an exaggeration, know that it isn’t.
People are Making Millions Of NFTs
NFTs are currently making a lot of money for a lot of individuals. For example, a visual artist called Beeple sold a digital collage for the astronomical sum of $69.3 million.
Furthermore, nearly 29,000 collectors pooled their money in December to pay $91.8 million for a single piece of digital art. It was the most money ever paid for a living artist’s work.
The artist Grimes also sold a group of NFTs for about $6 million. In addition, an NFT of LeBron James’ historic dunk for the Lakers brought in more than $200,000. In addition, Kings of Leon’s new album was released as an NFT.
And the list keeps getting longer.
It can be challenging to understand NFTs and all that’s going on in the market if you’re new to cryptocurrencies and digital assets. But don’t worry. We’ll give you a crash course in everything non-fungible in this guide.
Let’s begin.
What Is An NFT?
NFT means non-fungible tokens.
It’s non-fungible, which means it can’t be traded for something else of equal worth. For example, you can exchange two $10 bills for a $20 bill. These are fungible. However, an NFT is unique.
Think of an NFT as a certificate of authenticity for digital collectibles. It’s a unique string of characters such as 0x56f80100c31a0d46z52199200f9df786054aa5aa4.
This string is linked to a blockchain, the same technology that powers cryptocurrencies such as Bitcoin. The primary distinction is that bitcoins are fungible, meaning they’re basically the same.
Blockchains function by having several computers establish a shared digital record that a single computer can’t alter. Instead, they must agree through intricate mathematics, resulting in a safe and irreversible record.
As a result, blockchains are ideal for developing systems that allow for the easy and secure exchange of unique digital IDs, which is why NFTs were created.
What Exactly Do You Get When You Purchase An NFT?
When you purchase an NFT, you’re paying for a token (a currency unit on the blockchain). And that token represents a one-of-a-kind item when you buy an NFT from one of the many NFT marketplaces like UCOLLEX.
In other words, you’re paying for a short digital record to be transferred to your blockchain address. That’s all.
Having this token means you can verify you own a specific item and that it’s genuine.
Unless you sell or gift that NFT to someone else, no one can own it.
NFTs are like having custody of the deeds to a home. The deeds, not the house itself, constitute a record of ownership. Similarly, an NFT is a record of an asset’s ownership or validity, not the item itself.
Why Own An NFT?
The popularity of NFT art has recently soared. There is, however, much skepticism. NFTs, after all, is usually associated with digital information.
Is there any value in “evidence of ownership”? And what distinguishes owning an NFT from taking a screenshot of an image?
Here are some of the most common reasons people own NFTs to help you decide.
1. Collectibility
Did you know that a 1952 Mickey Mantle rookie card sold for $5.2 million even though it cost less than 5 cents to create? The card’s cultural significance, rarity, and history all played this role.
NFTs are the digital equivalent of this in many ways. NFTs provide a once-in-a-lifetime chance for people who desire to establish a digital asset collection outside regular collectibles and art markets.
2. Investment
Some NFT owners merely want a growing asset. Some collectors regard NFTs as investments, similar to traditional art. This is why some companies are now setting up an NFT rewards program that aims to reward customers with NFTs for their loyalty.
Some may find this unusual, given the image is visible to all and maybe interact. However, as previously stated, one NFT owner is permitted. This is sufficient for some.
However, investing in NFTs carries a high risk of significant losses due to market volatility. So take the time to do your research before proceeding.
What Should You Make Of NFTs – Final Thoughts
So, if you’re an artist, don’t hold your breath for a famous brand’s NFTs to appear. Instead, examine the marketplaces that are now accessible to determine how well they fit your specific offerings and business goals, and if one appears to be a good fit, jump in with both feet.
Even though NFTs are still a new phenomenon, they’ve proven to be promising and highly profitable. They provide substantial value to buyers and sellers.