By Mashum Mollah
Chances are, you’ve heard of bitcoin and probably stepped up over buying it properly. You might not be entirely sure just what bitcoin is, but you’ve likely heard someone speak about it or at least seen headlines centered around it. But do you know what NFTs are?
Let’s start with the definitions of NFTs and what are NFTs.
The Definitions Of NFTs?
In recent years, there has been a rapid rise in the popularity of other digital assets; NFTs, or non-fungible tokens. The word ‘fungible’ relates to something that can be exchanged for something else of equal value. So, a non-fungible item is unique in that it can’t be traded for anything else that is the same. This is the regular answer for what NFTs are.
An NFT exists solely in the digital realm; it has no physical form whatsoever. The ‘token’ in question is essentially a certificate of ownership; once you buy an NFT, you are the sole owner of it. Copies can be made of the asset, but you will always own the original for as long as you retain the NFT.
A copy of that certificate is stored in the blockchain, which is backed up by an eye-watering amount of computing power, meaning it is secure and can’t be duplicated.
Are The NFTs Assets?
There’s also no real definition of what an NFT asset is. Usually, it’s a form of digital art, but it can also be anything from a short video to a signed tweet. Essentially, if people are willing to pay for it, you can make an NFT out of it.
This is quite exciting for artists and creators as it opens up a new avenue for them to make money, though the marketplace is unpredictable. Let’s see what NFTs are and how the NFTs are operating.
The lineage of NFTs can be dated back to 2012 and the inception of ‘Colored Coins.’ These were essentially colored bitcoins that had added value unique to that of standard bitcoins and so could be used for more substantial purchases such as real estate.
However, the technology behind bitcoin was not robust enough to keep this initiative afloat, and so it died off. The seed for NFTs had been planted, though.
In 2014, a peer-to-peer financial platform called Counterparty was established on the blockchain, and it soon birthed a marketplace for digital assets to be sold. As is expected on the internet, these assets were just memes that people sold each other.
How Is NFTs Becoming Popular?
NFTs truly hit the mainstream in 2017, though. First off, CryptoPunks launched the world’s first-ever marketplace for rare digital art on blockchain technology. So now you know what NFTs are, but along with the definitions, you will know NFTS are making the differences.
The organization gave away 10,000 designs for free, producing an enormous secondary market with these assets selling for large sums of money.
Then, CryptoKitties launched. It instantly went viral and received $12.5 million in investments. The idea was that digital ‘cats’ were sold, each with unique properties and ‘DNA,’ which could then breed and produce ‘kittens.’ Some sold for six-figure sums, and the phenomenon of NFTs was cemented in mainstream culture.
Part of the appeal of NFTs is that they’re not just for art collectors or aficionados; they can be for everyone. Mainstream music artists like Grimes and deadmau5 have produced NFTs, which have sold for millions of dollars.
Athletes are also getting involved by working with companies to produce NFTs that their fans can buy; essentially, they are pieces of digital art featuring the athlete that people can purchase.
The Example Of NFT MarketPlace
For example, DraftKings has a new NFT marketplace that offers signed artwork of sports stars like NFL legend Tom Brady and ice hockey icon Wayne Gretzky. Scarcity is an important aspect of NFT marketplaces, so suppliers like DraftKings hold regular ‘drops,’ where they release a small number of assets at a time for people to buy.
Some will be released in batches of thousands and will be relatively cheap to buy, while others only have a handful available and are therefore much pricier.
As such, these NFTs are exclusive to DraftKings and can’t be found anywhere else until they are purchased and potentially placed on the secondary market, though at that point, they will likely be more expensive. You have first to know what NFTs are and how the NFTS Markets are making the differences.
World Largest NFT Market
OpenSea is the world’s largest NFT market and features a wide range of art and assets that can be purchased online. There will still be ‘drops,’ but given the size of the market, there are also plenty of NFTs to browse through at any one time.
The price of these NFTs will be listed in Ether (ETH), which is the cryptocurrency of the Ethereum network, which is the blockchain on which NFTs are sold. OpenSea will specify how much NFT costs in the real-world currency as well, so you know how much you are actually paying.
Super Rare is a market targeted more at collectors than the general public as it only features single edition works, meaning each NFT only has one version. Each work will be released at a certain time, and people can put offers in to purchase it and what are NFTs functions.
Conclusion:
At first, NFTs and their markets can seem a little confusing and daunting, but once you take a closer look, you can begin to see the attraction. With varied designs and forms, you can own assets that appeal to you or are directly linked to things you are passionate about, such as a sports team or movie franchise. We think the answer to what NFTs are is clear to you. And with the definitions, you know how the NFTs are functioning.
Don’t forget to get in touch with our exclusive guide on buying luxury goods with Bitcoin.
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