The Wide World of NFTs
NFTs and How They Work
“NFT-Rainbows waiting for the storm to pass” by Life Imitates Doodles is licensed under Creative Commons
NFTs are a relatively new concept, and the craze for buying and selling them is even more current. But what even is an NFT? NFTs, or Non-Fungible Tokens, are item brandings which make it possible to own almost anything. They are different from Social Tokens in that they’re completely original. Social Tokens are tradable tokens which can be used en masse, for replication of a digital feature, in-game item, or even by content creators for special privileges like access to private chats or special deals. NFTs, however, are unique, which is why they’re Non-Fungible. They also operate differently from most trading items because they’re more valuable the more commonplace they are. This is because the more people who know about it, the more people who might want to own it as an NFT. It’s like if there was an NFT of The Starry Night. The fact that it’s all over the internet would positively, not negatively, affect its value.
NFTs use blockchain technology to keep track of their history. Blockchain is where every purchase is tracked, which helps with security. Instead of just a price or a value being held on to, the NFT’s entire history is stored. This way, it’s much easier to tell if an unauthorized or incorrect purchase is made. It can also improve the NFT’s value. Say, for example, there’s a piece of art that a well-known celebrity bought, and they later sold it again. If it goes through several more purchases, it still retains the value it gained from being owned by that celebrity. People would be clamoring to own something that has someone famous’ name on it.
All in all, NFTs are a pretty simple concept. They’re an innovative form of trading that can completely change the way our economy works in years to come. And though their applications may get a bit confusing, hopefully this article helped you to understand the basics.
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TAKE ACTION:
Digital trading site – opensea.io
Cryptocurrency storage and conversion – coinbase.com/wallet
