5 Facts you must know about Non-Fungible Tokens (NFTs)
We have been gripped by ‘NFT fever’ – and if experts are right (and they generally are), Non-Fungible Tokens are here to stay! As we approach the twilight of 2022, the NFT storm in gaming, art and fashion is unrelenting and it’s clearly here to stay.
“Oh, but you mustn’t invest in them … this is just a passing trend … this is just speculators ‘milking’ the market” – NFTs seem to have withstood all of this and are continuing to make headlines as they trade for millions of dollars.
So just what is an NFT and why is it taking the digital world by storm?
Here are 5 Facts that every speculator, investor or first-time dabbler must know about Non-Fungible Tokens:
Are NFTs related to Cryptocurrencies?
An NFT is a Digital Asset or Token and the underlying software that encodes it is very similar to cryptocurrencies. This is why most NFT purchases and sales online happen via cryptocurrencies. Another reason why NFTs are closely linked to cryptocurrencies is that unlike conventional currencies/money, NFTs are Non-Fungible – meaning that they cannot be exchanged or replaced with other similar tokens. This is very different to how conventional currencies work, where a 1 dollar bill can be replaced/substituted with another one of the same value. Each NFT token on the other hand is absolutely unique.
Just what all can become an NFT?
NFTs can be digital assets portraying pretty much any real world object/item including music, artwork, videos, in-game artifacts and even jokes or memes. The fact that each NFT is unique, makes it a ‘collectible’ and thus desirable. When an NFT of let’s say a priced painting is purchased, the purchaser purchases the digital file of the painting and the proof of possession, rather than the actual physical object itself. Twitter’s founder Jack Dorsey once converted a tweet of his into an NFT and sold it for $ 2.9 million.
How much is an NFT worth?
One might think that a ‘digital depiction’ of an actual product might not be worth very much. But guess again! The pandemic was an absolute blessing for the NFT market, with the total traded worth exceeding $ 25 billion worldwide. An NFT artwork titled EVERYDAYS: THE FIRST 5000 DAYS, created by the famous digital artist Mike Winkelmann raked in a staggering $ 69.3 million!
Where can I buy/sell an NFT?
NFTs can only be purchased by sites such as Open Sea NFT, Rarible, NFT Showroom, SuperRare and a few others. This is because even though an NFT looks like any odd image you might find on the internet, purchasing an NFT needs one to also pay for the blockchain space that recognizes the image/file as an original NFT with value.
Are NFTs divisible?
No. Unlike Cryptocurrencies, NFTs are indivisible. Meaning, that they cannot be broken down or traded in parts. No two NFTs are the same and no NFT can be split into two.
The future is Fun, Fabulous and Non-Fungible!
And we @ Bio-idz recognize it.