Did you know the most expensive NFT to date sold for $69 million? By the artist Beeple, it brought this new marketplace firmly into the mainstream. But do you actually know what an NFT is?
As a new way to authenticate ownership, everyone from musicians to major brands has jumped on the craze. Read on as we give five things you need to know about NFT tokens.
Table of Contents
1. NFT Tokens
NFT stands for non-fungible token. If an asset is a fungible item, it means that it can be copied. Digital works, from art pieces to online real estate, can now have a non-clonable certificate of authenticity.
Many people assume that an NFT is a cryptocurrency. It isn’t, just like a painting or antique is not a currency. It is a unique asset, and like these items and currency itself, values rise up and down depending upon rarity and how many people want to own the item.
2. Where Did They Come From?
Surprisingly, the NFT dates all the way back to the eighties. A company named Creature Labs designed it as part of an online virtual pet simulator game. This concept would later re-emerge with the advent of cryptocurrency and culture in the game Cryptokitties.
Online NFT trading as we know it comes from a series of artworks known as Cryptopunks. Originally, they were given away for free. However, as the first instance of NFT items becoming tradable, they now command a high price on the cryptocurrency tokens market.
3. How Do They Work?
NFT uses blockchain technology. This is a series of linked data blocks. A collected digital ledger, it can record information on everything from accountancy to NFT ownership.
Blockchains exist across different servers, meaning that this ownership is very transparent. It is also extremely hard to tamper with data and falsify it, as everyone can see when it was done. What to know about NFT technology can be found here.
4. Who Is Using Them?
Currently, the range of people creating them is vast. Artists and musicians are using them to build capital. One bonus is that when the NFT is sold on a second-hand marketplace, the original creator will gain a percentage of that sale.
However, many major brands have also begun creating them. Nike and the NBA both have their own NFT products. Even companies like the toilet paper brand Charmin have designed their own.
5. How Are They Made?
You don’t really need any technical knowledge to create a non-fungible item. Start by opening a cryptocurrency wallet and connect it to a marketplace such as Rarible. They all have sections where you can mint new NFTs, then save them for yourself or put them up for sale.
Buying NFT Tokens
Now you know about these NFT tokens, try buying some you like. Unfortunately, it can be hard to predict what will accumulate value in a market so new and volatile. So instead, check out some of the amazing artistic creations and invest in them.
If you enjoyed this article, we have many more. From cryptocurrencies to fiat investment, we can help grow your wealth in the coming year!