Digital assets are the next big thing and we cannot unsee their growing popularity. Non-fungible tokens or NFTs are digital assets that are selling for millions of dollars today. These digital assets exist on a blockchain kept on networked computers. Supporters view NFTs as the next big phase in the art collection. However, many people find it difficult to grasp what NFTs actually mean. They wonder why so much money is invested in an artwork that is present only in a digital form. Here are 10 points that explain what NFTs are, their kinds, and their market growth.
What Are Non-Fungible Tokens Or NFTs? All You Need To Know
NFT is a digital asset existing on a blockchain with a unique signature. The blockchain allows anyone to verify the authenticity and ownership of an NFT.
NFTs are usually bought with cryptocurrencies. Sometimes they are also bought in dollars or fiat currencies. Transactions are recorded on the blockchain.
NFTs do not mean only digital art. NFTs can exist in different forms like images, videos, music, and text. Even tweets can be bought and sold as NFTs.
NFTs can also be digital clothing or plots of land in virtual world environments. NFTs can also refer to the exclusive use of a cryptocurrency wallet name.
NFTs are in trade since around 2017. The NFT market surged in popularity in early 2021. In August 2021, there was another rise in the trade of NFTs.
For some people, NFTs are a prized possession in a virtual environment that can determine their social status and personal taste in front of all.
For investors, NFTs are tempting because of rising prices, which can bring them good returns on trading and earn them some profit. Many buyers sell NFTs only within a few days or even hours of purchase in order to gain profit.
The market has recently seen a surge in price gains in cryptocurrencies like Bitcoin. This has created a group of investors who are rich in cryptocurrency and spend it on buying NFTs.
NFTs can help artists solve the problems related to the monetization of artwork. NFTs can provide them with a better income as they will receive a royalty every time the NFT is sold after the initial sale.
NFTs don’t guarantee all-time constant profits. Like cryptocurrency, NFTs are also unregulated and no one can assure their value. If the hype dies, losses could pile up instead of providing any gains.