Should you consider investing in NFTs?
Think of NFTs like a shape-shifting asset, they can take the form of any online content. From digital art to sports clips and even memes, NFTs have become immensely popular. NFTs or non-fungible tokens are digital assets that are managed in a digital ledger. In technical terms, these digital assets are attached to a unique value with a certificate of authenticity, which stops them from being duplicated. Like cryptocurrencies, NFTs also exist on a decentralized digital platform that is powered by blockchain technology.
Going By the Book
Merriam-Webster officially describes NFTs as “A unique digital identifier that cannot be copies, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership of a specific digital asset.
From graphic designers to content creators, NFTs have opened gates for a new buying and selling platform for the art world. NFT exchanges are marketplaces that have attracted the interests of collectors, investors, celebrities, and actors. Through NFTs, content creators can sell their work globally and collectors can access markets from any part of the world.
How Do NFTs Get Their Value?
A non-fungible token is a certificate of ownership of a digital asset. The value is assigned according to the collectibility of the asset and its future sale value. In February 2021, digital artist Beeple sold the NFT for their Everyday – The First 5000 Days artwork for a whopping amount of US$69.3 million. Jack Dorsey, the founder of Twitter, sold the NFT for his first tweet for IS$2.9 million.
What Can You Do with NFTs?
Speculators will question if there are any uses to NFTs. Though the concept is still in its initial stages, NFTs have several potential applications.
• NFTs can be used for event ticketing. If tickets are made with NFTs, the exchange of the ticket is going to get recorded which means there is no chance of someone scalping, stealing, or counterfeiting tickets.
• The fashion industry will benefit from NFTs. Having a digital record of authenticity will eliminate counterfeiting of luxurious goods. Luxury items can also have attached NFTs to show their genuineness. NFTs can also keep a track of the data about the origins of items, where they are sourced from, and how far the items have traveled.
• NFTs provide gamers with a unique way of owning game items and merch.
Can You Create an NFT?
If you are a digital artist, you can turn your work into an NFT. To create an NFT, there are many platforms that will ease your process. But there are few things you need to bear in mind.
• NFTs are powered by blockchain. The most popular choice is the Ethereum
• You need to have a cryptocurrency wallet with cryptocurrencies. The preferred crypto coin is Ether.
• You can create your digital assets and sell them on an NFT marketplace. The popular choice is OpenSea, an Ethereum-based platform.
What Is the Future of NFTs?
Now that you have a basic understanding of what NFTs are and how they can serve a purpose, the concept is futuristic but possible. There is a possibility that NFTs will be widely used in the coming years and reach the likes of cryptocurrency. However, the technology is in its initial stage and there are several challenges to overcome.
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