Digital assets are growing in popularity and non-fungible tokens (NFTs) are the latest trend. In recent months, NFTs have seen many takers.
These unique digital assets exist on an Ethereum blockchain. NFT enthusiasts see it as the next big phase in art collecting, which can benefit both artists and art collectors.
Trading in NFTs started around 2017, but this latest digital asset gained popularity in early 2021.
It might come as a surprise to many that NFTs cost millions of dollars. Here are the important things you need to know about NFTs, how they work, and even how you can create your NFT.
What is NFT?
Non-fungible means that these digital assets are unique and cannot be copied or replaced with anything else. These are the digital assets on a blockchain, each NFT having its unique signature.
The ownership and authenticity of an NFT can be verified by those who want to buy it.
NFTs are not just digital art, but they can take the form of images, drawings, video clips, music, or text. Even tweets and a signature can be bought or sold as NFTs.
How do NFTs work?
NFTs use a new standard Ehtereum ERC-721 blockchain. The Ethereum blockchain supports NFTs and stores additional information to identify unique assets and help them function differently from the Ethereum cryptocurrency.
How to buy NFT?
You can buy NFTs with cryptocurrencies. A few NFTs can also be purchased in dollars or fiat currencies. Each transaction of an NFT is recorded on the blockchain.
Are NFTs a good investment?
Many people consider NFTs to be a good investment due to the rising prices. Many buyers sell NFTs even hours after purchase to take advantage of the price surge. NFTs are also emerging as a new avenue for artists to monetize their works.
NFT creators can also get a royalty for each transaction after the first sale of their digital asset.