What are NFTs? Here’s Everything You Need to Know.
Here’s an explainer to NFTs.
Earlier thisyear, the creator of the popular Nyan Cat GIF decided to celebrate its 10-year anniversary by selling a digital asset known as an NFT (a non-fungible token) at auction. The sale, hosted by the NFT marketplace Foundation, accumulated a whopping 300ETH—that’s for the blockchain called Ethereum—or the AUD equivalent of roughly $1,462,275 right now. For those who are new to the world of NFTs, you might ask, “What are NFTs?” Well, here’s a short explainer on the topic.
What are NFTs?
For those of you who want to know what are NFTs, we have simplified it. NFTs or non-fungible tokens are the latest cryptocurrency rage. They are a type of cryptocurrency which are created on a smart contract platform like Ethereum. They are also unique digital objects that people might own to appear cool or to earn a tidy profit. These digital collectible cards will only be worthy of a lot of money one day if you get a rare one.
How Fungible NFTs Differ from Non-Fungible?
After you understand what are NFTs, the next thing to understand the difference between fungible and non-fungible NFTs. Fungible NFTs are currency units or tokens which are the same and equal like grains of rice. Non-fungible assets, on the other hand, are unique and cannot be replicated.
How do NFTs Work?
How NFTs work depends on the platform, you choose. For instance, on Ethereum, NFTs are created on its blockchain that is immutable. Hence, no one can undo a person’s ownership or recreate the exact same one. As NFTs are permissionless, anyone can create, sell, or buy them. They are also unique and can be viewed by anyone.
How to Buy or Trade NFTs?
If the answers to what are NFTs and how they work have inspired you to buy them, you should know that they can be buying and traded like all other cryptocurrencies. The only difference is that instead of buying different tokens, you will purchase a single token.
To initiate the purchase process, you need to install a program like MetaMask, a browser extension that allows you to interact with different facets of Ethereum like decentralized apps or exchanges. The software is also essential as it serves as a digital wallet for Ethereum and all the tokens that are created on the platform.
After installing the program, you can buy NFTs directly with the help of Apple Pay or a debit card by clicking on Add Funds. Make sure you store the password and the private key of the wallet in a safe place. After adding money, you can visit a website like NBA Top Shot that sells NFTs or visit an exchange. Then you can collect the wallet to the site and complete the NFT buying process.
Hope this piece has allowed you to know what are NFTs and given you some idea about whether you should invest in them.
In other news, the Samsung 8K TV that will cost AUD 22,000 is also making people curious. Know about it here.
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