What Is NFT and How Does It Work?

What is NFT
What is NFT

The rise of NFTs was such a big explosion. Art, music, cool pairs of sneakers, tweets, photos – anything can be monetized through NFT selling platforms and work as an asset for years to come. While some people have already become NFT investors, some are just thinking if it is worth the hype.

So, what is an NFT?

Partially, the answer lies in the name. NFTs stand for non-fungible tokens, which means that they are a type of value that cannot be exchanged for similar items. Unlike cryptocurrencies, which can always be traded, each and every NFT has a unique signature that doesn’t allow the item to be traded to another NFT because they aren’t equal in value.

For example, one zombie Crypto Punk isn’t equal to Joker of The 21st Century just because they both belong to the category of non-fungible tokens.

How Do Non-Fungible Tokens Operate?

Like cryptocurrencies, NFTs are ‘at home’ on the blockchain – the distributed public ledger recording transactions. NFTs originate at the Ethereum blockchain, though, theoretically, they can be supported by other blockchains as well.

To extend your view on NFTs, it needs to be mentioned that they can be created not only from images or audio but also GIFs, videos, social media avatars, etc. There is even a guy who sold his tweet as an NFT for 2.9 million dollars (you’ve got to be popular to do it).

All pictures in new NFT collections also contain ownership rights, so only 1 owner is possible. These items can also store some ‘hidden’ data in them.

How Can I Pool Money In NFTs, and Is It Possible to Get Profit?

While everyone can invest in NFTs, not everyone knows how. Now, when you know the answer to ‘What is NFT technology?’, feel free to explore more.

To get ownership over a non-fungible token, you will need a few things:

  1. A virtual wallet that allows storing cryptocurrency and NFTs.

At the first stage, you are most likely to buy ETH coin. This is easy to do with a credit card with a platform like Coinbase, Kraken, eToro, or just PayPal. Then, transfer your cryptocurrency to the chosen wallet.

  1. Search for a reliable NFT marketplace.

Keep fees in mind when looking for platforms for buying trending NFTs. There is really plenty of them, but we recommend you to look at these:

  • Rarible.

This is a nice place where any artist, no matter famous or not, can boast digital masterpieces they create and sell them well. At these platforms, Rari tokens are great to use as they let you save on fees.

  • OpenSea.io.

Another democratic and convenient platform, the website with one of the biggest NFT collections allowing anyone to surf through NFT technology. A popular place to get acquainted with new artists and group items by category.

In case you want a more structured approach to top NFT collections, give notice to Top NFT Collections. There, you will have all the news and updates on the best and most popular digital artworks to buy right now. It is given in the form of a chart including the volume and price.

It’s not difficult to choose one, but the question is whether it is right for you. Maybe, it makes sense to start with small steps and invest a small amount in new NFT technology. So, the answer to the question ‘How to invest in NFT technology?’ is very individual.

And remember that demand drives the price and if NFTs remain on the rise, the ones you buy will probably grow in price.

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