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What is an NFT, and how exactly do they work?

You are not alone if you have no idea what cryptocurrencies and NFTs are all about. I had no idea myself until recently. As crypto has skyrocketed in popularity, NFTs have also ascended, growing into multi-million dollar industries over the last two years. NFTs are changing the world around us and are revamping the way we emotionally value things. 

Before we jump into buying NFTs, we must first ask ourselves – what is an NFT, and how do they actually work? Like your thumbprint, no two NFTs are the same, making them non-replaceable. No matter the form of the NFT, it is considered unique and is certified with a digital certificate. 

What an NFT is in Simple Terms

Non-Fungible Token. For those of you not familiar, a non-fungible item is viewed as extremely rare and cannot be traded for another of equal value. Here is an example of a non-fungible thing. 

Let’s say you bought a pair of leather boots online and have worn them every day since. They have formed perfectly to your feet and match every outfit in your closet. Then, one day, you go to put your favorite boots on, and you notice a hole.

You scream and want to die if you’re anything like me because you know you will never find boots as perfect for you as those were. You built an emotional attachment that cannot be replaced. We cannot set a value to items because we find them in-valuable. 

Currently, there are ten significant types of NFTs available to the public on platforms such as OpenSea and Axie Marketplace. OpenSea is not only the first, but the largest marketplace for NFTs. It allows you to create, buy, sell, and auction NFTs. Creators can mint NFTs for free and escape the gas fees (transaction fees) while using the Polygon-based marketplace.

Here are the top ten NFTs:

  • • Gaming/Video game items
  • • Digital artwork
  • • Music and media 
  • • Domain names
  • • Memes
  • • Collectibles
  • • Virtual Fashion
  • • Event Tickets
  • • Big Moments In Sports
  • • Real-world assets (real estate, land)

NFTs are designed to give the buyer something that no one else has. Sure, everyone might be able to see your digital painting NFT, but only you own it, curating a gratifying experience unlike any other. 

What do you do with your NFT?

There are many different options for your NFT once you have purchased it. Some buyers will hold onto NFTs for upwards of six months or more in hopes of the value significantly increasing. Coined “Holders”, they do not believe in the quick fix method of buying and selling quickly for a profit. They wait it out for large ROIs or hold onto the NFT themselves. 

If you’re an artist looking to auction on the NFT marketplaces, you will directly link to your audience and have complete control over the sale. Artisans are finding much success on the platforms and are looking for more ways to expand. 

With creative entertainment studios like Non-Fungible Films, creators are empowered to take imagination to the next level. The NFFilms crew will help you generate your own Intellectual Property with your NFTs. Have you always wanted to be in the film industry and never had the opportunity? NFFilms and Web3 are changing everything!

How does an NFT actually work?

A cryptocurrency is a digital form of money used to make purchases through secure transactions. An NFT is a token of ownership. It is a digital asset that can be bought or sold online. Every transaction recorded publicly on the internet is called the Blockchain. Although similar, NFTs are not the same as cryptocurrencies like Bitcoin, Litecoin, and Tether.

Blockchain is a virtual system in which a ledger of transactions made in cryptocurrency is monitored and verified across several computers linked together in a public network. Each transaction is recorded as a “block” and transmits across the entire portal. 

The block contains ownership data as well information like who sold it. It also includes the breakdown of the blocks created before and after, linking them into a chain. This makes each and every transaction a secure, unalterable blockchain used to verify its authenticity and ultimately create an ideal way of conducting business online. 

Conclusion

A new and exciting world revolving around technology has emerged. NFTs and cryptocurrencies are quickly becoming the standard way of doing business, collecting memorabilia, and selling homes. As with all assets, it is possible to make money with NFTs if you educate yourself and invest responsibly.

With this evolving technology available to everyone worldwide, the possibilities are endless! We must remain diligent in educating ourselves and staying abreast of the progressing industries. After all of the research I have done there is no denying that NFTs are here to stay! 

What is an NFT?

An NFT is a digital asset that represents a unique item, such as a piece of art, a video game item, or a collectible. NFTs are stored on a blockchain, which is a distributed database that allows for secure and transparent transactions.

How are NFTs different from other digital assets?

Unlike other digital assets, such as cryptocurrency or fiat currency, NFTs cannot be replicated or exchanged for another asset. This makes them ideal for rare or one-of-a-kind items.

How can I buy an NFT?

There are a few ways to buy NFTs. Some artists host their own sales, others sell through online marketplaces such as OpenSea or RareBits. You can also purchase NFTs from other users using cryptocurrency or fiat currency.

How can I store my NFT?

NTFs can be stored in a wallet, which is typically a software application that allows you to manage your private keys and interact with the blockchain. There are several different types of wallets available for different platforms, so you should do some research before choosing one for your collection.

Are there any risks associated with buying or selling NFTs?

As with any asset, there is always some risk involved in buying sold on various online marketplaces. However, because they are stored on a blockchain, they can also be traded peer-to-peer.

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