Everyone is talking about NFTs these days. Let’s take a look into what they are!
NFT stand for Non-Fungible Tokens. In the simplest terms, it’s a form of digital art that no one can counterfeit. It gets its value from scarcity, and blockchain allows you to do that. Non-fungible tokens have created a new market for digital art. No one NFT is the same as another, they are characterised by their unique qualities, as well as authenticity. NFTs gain value of the same deflationary principles as Bitcoin.
So basically, an NFT is anything that has a digitally encrypted signature. They are valuable because they’re rare and unique. It could be art, collectibles, trading cards, sports collections, music, and even domain names on decentralised network.
“If you are an artist and still don't use NFT (Non-Fungible Token), you are potentially missing millions of dollars.” ― Olawale Daniel
Some examples of NFTs
1. A digital rendition of the Nyan Cat meme from 2011 sold for about $590,000 in an online auction in February 2021. This meme had originated on YouTube and it quickly became an internet sensation.
2. Beeple created an art everyday for 13 years and posted it on his social media. Over the years, he's developed a large fan base, with around 2.5 million followers. His piece, Everydays: The First 5000 Days, is a collage of his work starting at the beginning of the project. It was sold for $69 million!
3. Another great example is Amrit Pal Singh. He makes toy faces and 3D illustrations of people and characters that inspired him. He has also created these lego-like characters that pay homage to well known artists and astronauts. The success of such NFTs provides a good roadmap for predicting where this new form of digital currency might be headed in.
4. Virtual Worlds are being created where you can own a piece of land online. That is also an NFT. A good example of this is Earth 2. Earth 2 is a futuristic concept for a second earth. It is like a metaverse, between virtual and physical reality. In this, real-world geolocations on a sectioned map correspond to user generated digital virtual environments. These environments can be owned, bought, sold, and in the near future deeply customized.
Difference between NFTs and Cryptocurrencies
NFTs are different from cryptocurrencies in that they do not rely on mining. They have a set number of tokens that will ever exist, meaning their supply is finite. There’s no need to compete with other miners to generate more tokens and there’s also no danger of having the blockchain change because of an algorithmic or code error.
Tokens can be transferred from one person to another without any intermediary involvement needed, thanks to cryptography as well as mathematics based consensus algorithms like Proof-of-Work.
Where to buy and sell NFTs?
There are different platforms that have a variety of Non-Fungible Tokens. Here are a few top ones:
These websites enable artists to showcase their work. These are also potential platforms for people to buy art and NFTs from.