Blockchain technology has rapidly burst into our lives and today it has already disrupted, replaced thousands of industries.
New blockchain products and methods of using them are constantly emerging. One of the most prominent features has been the non-interchangeable token, more commonly referred to as NFT.
Recently, the non-interchangeable token has created a lot of hype and controversy around itself.
Many people still do not understand whether it is worth paying attention to NFT, and some do not even know what it is and for what it can be used.
That’s why we decided to take a closer look at what NFT is, where and how it’s used, and whether and how to buy a token.
What is NFT
An NFT is a digital asset that can come in the form of art, music, in-game items, videos, and more. An NFT is identified by its individual qualities displayed in its metadata.
The token has been uniquely designed, its minting ensures that the digital asset cannot be replaced or altered.
Tokens are bought and sold online, often with cryptocurrency, and they are, in most cases, encoded using the same underlying software as many cryptocurrencies.
NFTs first appeared on the market in 2014, but it has been more recently that they have become the most popular.
The important factor is that when you buy a non-interchangeable token, you become its sole owner – no one in the world will be able to claim it because you will have proof of ownership.
NFTs are one-of-a-kind, or at least issued in a very limited edition, and have unique identification codes. NFTs have been in tremendous demand lately:
- Twitter co-founder Jack Dorsey sold his first tweet as an NFT for more than $2.9 million.
- In 2021, the value of the NFT market surpassed the $40 billion mark, slightly less than the total price of the entire global fine art market.
- At the end of 2021, one of these memes brought in $500,000 at the NFT market sale, OpenSea.
- The world record was broken on December 2, 2021, after an NFT called The Merge sold for $91.8 million.
The token’s records do not end there, and every year this direction gets more and more prospects.
NFT and cryptocurrency: what are the differences
The only similarity between NFT and cryptocurrency is that they are built using an identical programming method.
For example, Ethereum and Bitcoin are created using the same methods as NFT.
Cryptocurrencies are interchangeable, which implies that different types of crypto can be exchanged for each other.
They also have the same value – one bitcoin cannot be worth more than the same bitcoin.
Unlike cryptocurrency, NFTs come in different forms. Each has a personal digital signature, which makes it impossible to exchange or equate NFTs with each other (hence, they are not interchangeable).
For example, one NBA Top Shot clip does not equal EVERYDAYS simply because they are both NFTs. You can only buy an NFT for the value set by its owner.
NFT operating principles
NFT is hosted on a blockchain (predominantly Ethereum, although other types are also supported) and is presented as a distributed public registry. It is through this registry that transactions are recorded.
Today, NFT is mostly used to verify and prove the ownership of digital products. As a result, a large number of business owners are starting to use this technology.
From Nike, who made the risky decision to launch virtual sneakers. To well-known art galleries that are exploring NFT as an option to verify the ownership and authenticity of digital art.
In fact, NFT tokens are analogous to real collectibles, only in the digital world. It is like buying a digital file instead of a physical oil painting. In particular, NFT pictures are already hugely popular and widespread among users.
NFTs can have only one owner at a time thanks to the use of blockchain technology, it is possible to confirm ownership and transfer rights to a file between owners.
In addition, additional information can be added to NFT metadata, such as the individual signature of the creator of the product.
How and where is the NFT used
People interested in crypto-trading and collectible digital assets actively use NFT. The decision to buy NFT increasingly occurs to such users. Among the most popular uses of the token are:
- Digital Content. Creators have the right to their digital content, but at the same time, they can easily sell NFT pictures, memes, GIFs, and other products.
- Investment and collateral. Due to the fact that NFT and DeFi have the identical infrastructure, non-interchangeable tokens started to be used as collateral.
- Game Items. Many game developers use NFT in their products because it is beneficial for both developers and players.
- Domains. NFTs can provide sites with simpler and more memorable domain names, which improves conversion rates and increases the popularity of the resource.
Today many large companies are interested in NFT, and such famous people as Snoop Dogg, Sean Mendes, and Jack Dorsey are interested in how to sell NFT. Let’s take a closer look at all the features of using NFT in different industries.
The most logical application of NFT is considered to be the verification and validation of cryptographic art.
Thanks to the unique identification functions, artists and investors can verify the authenticity of NFT pictures and other artworks and exclude the possibility of forgery.
Metaworlds are places where NFT is actively applied. In such virtual worlds, users have the ability to view, buy and store NFTs in their personal virtual real estate zone.
Licenses and Certificates
NFTs are a great solution for the licensing and certification industry because they can be used to verify university qualifications and other licenses.
Tokens eliminate the risk of counterfeiting and fraud, which is extremely important to employers and companies.
Games and Collections
Blockchain gaming and digital collections are considered some of the most frequent uses of NFT.
With billions of gamers buying digital items in games, non-interchangeable tokens give users the ability to own their items outside of the encapsulated environment of the game.
They purchased the products and even allow them to use resources in another app or metacomiverse.
Is it worth buying the NFT
More and more users are wondering if it is worth buying an NFT. There is no unambiguous question to this question because each user has to make a decision individually.
If you have free finances and the purchase has value for you – you can buy NFT.
It is important to keep in mind that NFT has not yet been fully researched and it is difficult to talk about the prospects.
You should also understand that the value of the product is formed solely based on demand. All this means that NFT can be resold for less than you paid for it.
There is also the risk of not being able to resell it if no one is interested in your offer.
How to sell NFT
Many people want to buy NFTs, and the question of how to sell NFTs arises just as often.
Nowadays, there are a large number of services that can be used to make transactions with non-exchangeable tokens.
First of all, you will need to create a virtual wallet, which supports NFT. You will also need to buy the cryptocurrency that is accepted by the selected provider.
Only after that, you will be able to start buying or selling NFTs.
You can sell NFTs on numerous marketplaces that provide such a service. In particular, among them are the following:
- OpenSea, etc.
Another popular service that allows you to buy NFT is Wellcoinex.
The company offers users the most favorable terms, and the company also supports different types of cryptocurrencies. A large number of functions and features make the service one of the most popular.