The world of NFTs (non-fungible tokens) or non-replaceable symbols is a realm of exclusive online art properties. Recently, news has spread about the sale of images, music clips, and even stickers for staggering amounts.
This digital trade has grown by 18,000% in just one year. Celebrities like Paris Hilton, John Cena, and Eminem now have their own NFT symbols. Despite NFTs being around since 2014, their concept remains unclear to a wide audience.
Perhaps the most famous example of an NFT is the world’s first tweet, sold by its owner, Twitter’s co-founder, for over $10.8 million after being transformed into an NFT. Let’s delve into these symbols further.
1. What are NFTs?
They are encrypted digital tokens linked to a unique digital origin, owned by only one person at a time. This encryption prevents manipulation, copying, or theft of the token, unlike non-encrypted digital items such as images that can be copied freely.
In simple terms, it’s akin to a Picasso painting. You can print a copy and hang it on your wall, but you won’t own the original unless you buy it.
2. Are NFTs like Bitcoin?
No. NFTs‘ connection to unique digital assets makes them more akin to human DNA, preventing similarities between two NFT symbols. Hence the name “non-fungible.” Bitcoin, on the other hand, can be exchanged for any other unit since each holds the same value.
In other words, Bitcoin units are like paper currency, each worth 10 dollars, with no difference in which bill you use to buy coffee. NFTs are more like houses, differing in location, space, room count, layout, windows, furnishings, etc., making it impossible for two houses to match 100%.
3. Why do people buy NFTs?
NFTs stand out for their rarity, and their price increases the more unique and distinctive they are. Purchasing an NFT is similar to buying a rare piece of art as a collector’s item.
People buy NFTs for the same reason they invest in rare art: the allure of uniqueness, the thrill of investment, and the dance of demand and supply. – Anass Habrah
Another reason behind NFT purchases is the potential for investment. People may sell NFTs at a higher price than they bought them, with demand and supply playing a crucial role in determining prices. Auctions are sometimes held, reaching values of thousands or millions of dollars.
4. How can you create your own NFTs?
First, choose the type of digital file you want to create, such as an image, video, GIF, sticker, or meme. Remember, the more unique and distinctive the content, the higher its value. Create your file using any application or software.
5. How does the NFT selling process work?
After creating your NFT, prove exclusive ownership through a smart contract registered on the blockchain. Set the price you want, and when sold, ownership transfers to the new buyer, who can sell it at their set price. There’s no limit to the number of times the same NFT can be sold.
As the creator, you receive a percentage, up to 10%, from each sale, even after losing ownership. Blockchain technology allows easy tracking of NFT ownership from one owner to another, with purchase dates. If you want to buy an NFT, you can verify its authenticity and history through the blockchain technology itself.
Note: This article is published for awareness purposes about a phenomenon gaining popularity in the digital trade world. It does not endorse NFT trading, and readers are personally responsible for their activities in NFT commerce. The article provides a brief overview, and a more in-depth exploration would require additional articles.