What is an NFT is a question that gained popularity lately. In this article, I will explain briefly what NFT is and why it has become so popular lately as well as all the important features related to it.
So, let’s start with the main question and that is to explain what does a non fungible token mean.
What Means Non-Fungible Token?
Non-fungible means unique. If you own something that is non-fungible, you own something that can’t be replaced with anything else.
Maybe it will be easier if you try to understand what fungible means. Let’s say you own 10 $ in one bill, you can easily convert it into two 5 $ bills and have the same value. Therefore, money is fungible.
On the other hand, you can own a house or car that is non-fungible. For instance, if you rent your house to someone, he can’t return another house to you. As a result, your house is a non-fungible asset.
In short, NFTs are cryptographic assets on blockchain technology and every NFT has its own unique codes that separate them from each other. They appear in form of digital artwork. It can be anything digital, like pictures, video, gif, and other types of digital files.
Now that you know that NFTs are we can see history of these assets.
When did NFT become popular?
The first NFT has its beginnings in 2013. Many people consider colored coins to be the first NFT to appear. Coins can be used to represent a multitude of assets and have multiple uses, including property, coupons, the ability to issue your own cryptocurrency, issue shares of a company, subscriptions, access tokens, digital collectibles.
In 2014 a peer-to-peer financial platform was founded and built on top of the Bitcoin blockchain. It is called Counterparty but also known as “Bitcoin 2.0“. It attracted various projects including trading card games and meme trading.
NFT became more popular in 2017 when the Larva studio produced Cryptopunks, 10,000 unique cartoon characters. Also, at the end of the same year, another project called CryptoKitties was released. In this project, players could adopt and trade virtual cats. Some cats sold for more than $ 100,000.
In 2019, Nike patented a system called CryptoKicks that will use NFTs to authenticate physical sneakers and give the customer a virtual version of the shoe.
Furthermore, in 2020, Dapper Labs released NBA TopShot. It is a project that sells tokenized collectibles from the NBA League.
Why Do People Buy NFT?
When you buy NFT, you actually get a unique asset and all his transactions as a signature. There are a number of reasons why people buy NFT, and some of them are as follows:
- People are diversifying their crypto holdings in other asset classes
- Storing value in art
- Support to creators of digital art
- The expectation of even greater popularity, and thus rising prices of digital art
How do I buy NFT?
It is not so hard to buy an NFT. I will divide what you need to do to buy NFT into three steps:
- Get a digital wallet
- Buy a cryptocurrency
- Buy NFT on the marketplace
Get a digital wallet
First what you need is a digital wallet. A digital wallet is a software that allows users to store funds, and make transactions. You can get a digital wallet through your bank or app. Some examples of digital wallet apps are Cash App, Google Wallet, PayPal.
Buy a cryptocurrency
After you get a digital wallet, you have to transfer cryptocurrencies to your wallet. You should check which cryptocurrencies are accepted in the market that you prefer. You can buy cryptocurrencies through eToro, Coinbase, Gemini, or other apps.
Buy NFT on the marketplace
Look on the marketplace for the NFT that you want. Some of the marketplaces that you can look for NFT are OpenSea, SuperRare, AtomicMarket, KnownOrigin, etc.
The marketplace is made as an auction, and if you like some of the NFT, set up a bid. Also, in some cases, you have the option to “buy now” as you have at auctions.
There can be additional fees that you need to pay when buying or selling NFT. On most platforms, users have to pay for the computer energy required to process and validate transactions on the blockchain. These so-called gas fees can also fluctuate during the day.
After you have bought NFT, you get digital artwork as well as the signature of the artist and all transactions that are associated with that particular artwork. In short, you get proof of uniqueness.
Now you know what NFTs are, that is, what they mean by non fungible, when they became popular, why people buy and how you can buy one.
It will be interesting to see whether this digital asset will be recognized by the world or not. What do you say, does NFT has a future?