What are NFTs?
Have you seen the word ‘NFTs’ frequently floating around the internet recently or overheard it in conversations, but have no idea what it means? Don’t worry! Following is a detailed description of NFTs to help you get a better understanding. NFT stands for Non-Fungible Token, and are digital units stored on a blockchain that represent videos, photos, GIFs, music, drawings etc. With the term ‘blockchain,’ you might be presuming that NFTs are similar to other cryptocurrencies such as bitcoin and dogecoin. However, there is a key difference between them.
As the name suggests, NFTs are ‘non-fungible,’ which means that they are unique and cannot be exchanged or traded for their equivalents, unlike cryptocurrencies which are ‘fungible’ and hence can be traded. Each NFT possesses a unique digital signature that makes it impossible for it to be stolen and this feature allows efficient buying and selling of NFTs in the digital market while lessening the likelihood of fraud.
The first NFT was created in 2014, but NFTs garnered much popularity from 2017 onwards particularly for utilizing NFTs to sell digital art in the market. By converting physical assets such as art to their digital equivalents with unique identifications, NFTs ensure much more efficient and secure transactions. If you are interested in buying NFTs, first you must purchase cryptocurrency such as Ether through a digital wallet and then finally you can purchase NFTs from popular NFT marketplaces such as Rarible and foundation. At the end of the day, whether an NFT is actually worth it depends on the perspective of the buyer as its future is not set in stone because NFTs are still new in the digital market. If you have money to spare, NFTs might be a potentially good investment for you, but make sure you understand the potential risks and do thorough research before purchasing them like any investment.
