NFTs are making waves in the online world right and there are lots of people who are yet to understand what NFT is all about or the difference between NFT and other cryptocurrencies.
If you’re one of those people. Don’t worry because this article got you covered.
What is an NFT?
NFT stands for Non-fungible tokens. It is something that has unique or rare attributes attached to it. A certificate of authenticity that you are the owner of an item. These objects are collectibles such as;
- A virtual card like NBA top shot
- Real Estate
- And more
People are discovering and finding new ways to tokenize their possessions. Recently, there have been a lot of reports about brands like Crocs, Nike, Adidas, Walmart, etc. Declaring their intention to join the NFT space to create, so they can mint their products as NFTs.
What is cryptocurrency?
Cryptocurrency is a virtual currency in which transactions are verified and the records are maintained by a decentralized system using cryptography eg. Bitcoin, Ethereum, USD, etc.
This is considered a digital or virtual currency that can not be controlled by any centralized authority.
Difference between other cryptocurrencies and NFTs
Although NFT is some sort of a type of cryptocurrency built with the same programming as Bitcoin and the rest, that is where the similarities end.
NFTs are non-fungible. That is they are rare and can not under any circumstances be exchanged with another NFT. This is because each NFT has a unique quality that can be possessed by another.
This is different with crypto because of its fungible nature you can exchange a coin for another and get the same value. Only one person can owner an NFT at a time while we can have many owners of a coin.
For other cryptos, there is always a possibility of coins seeing pumps when they dip, but for NFT you can buy a token or collectible for a humongous amount and end up losing everything without making a dime.
Why are people buying NFTs?
It is no new any long that NFTs are hot cakes in the digital markets now and you are aware of how expensive it is. But why are people buying some funny-looking images online when they could just right-click or screenshot.
Firstly, downloading or screenshots doesn’t make you the real owner of it, and your version is nothing.
Secondly, people are buying these NFTs to support the work of the artist they love.
Thirdly, people buy these NFTs because of their utility. They can turn you into a millionaire overnight and they give you a sense of belonging and an ability to be a part of a good course. That is if you buy an NFT that has a utility(ies) that values your interest and course.
Here are some popular NFTs making it huge in the digital market.
- Crypto punks
- Crypto kitties
- Bored apes etc.
Precaution before investing in NFT
NFTs can indeed make you a lot of money, but this solely depends on their utility. Ensure to research whatever NFTs you want to buy because there is a lot of shit NFTs are useless and scammers who will dupe you of your money.
legit platforms you can purchase NFTs from are;
- Nifty Gateway
- Larva Labs/CryptoPunks etc.
Hopefully, you understand what NFTs are, different from another crypt of and how valuable they are in the online community. If you wish to buy tread with caution. They are relatively new so you can never really tell, but they are worth trying. If you find it helpful kindly share with friends and family interested in the crypto space.