NFT has been taking on the world for a while now, it took off in 2020 and since then has garnered a lot of users or creators, basically in the digital art world. NFTs have gathered great excitement although at the same time have been criticized for being volatile and highly speculative and vulnerable to fraud. In this article, we look at what we need to know concerning NFTS.
MEANING AND DEFINITION OF NFT
NFT fully mean ‘NON-FUNGIBLE TOKEN’. Non-fungible means something is unique and can’t be replaced. Normally, physical money and cryptocurrencies are fungible which simply means they can be traded or exchanged (market) for another. All NFTs contain a digital signature which makes each one unique or special. NFTs are known to be digital assets and could be photos, videos, audio files, or another digital format. NFT examples include artwork, comic books, sports collectibles, trading cards, games, and more.
NFT WORK IN WHAT WAY
Non-fungible tokens or NFTs are known to be cryptographic assets that sit on a blockchain that is, a distributed public ledger that can record transactions. Each NFT contains unique identification codes that differentiate them from each other. This data makes it so easy to transfer tokens between owners and verify ownership.
NFTs carry a value that is set by the market i.e supply, and demand, and they can be bought and sold in the same way that physical assets can. NFTs can also represent real-world items such as artwork and real estate. Tokenizing real-world tangible assets in this way is considered by some users to make buying selling and trading them more efficient, as well as potentially reducing the likelihood of fraud.
HOW CAN I BUY NFTs
Buying NFT or NFT market is considered high risk, and its volatile highs and lows can deter even experienced investors. It is very important to have a clear understanding of the process before thinking of purchasing NFTs. Steps that are involved:
Open a crypto exchange account
The first step is to get an account open on a crypto platform or crypto exchange. This crypto exchange is an online platform where you can purchase different types of cryptocurrencies. To buy NFTs you need to create an account with your chosen platform. Various platforms offer different services, so it’s worth researching them to find out which suits you best in terms of features, fees, and ongoing support.
Open a crypto wallet
A crypto wallet stores the keys that grant access to your digital assets. Users are given a unique seed phrase also known as a recovery phrase- to access their wallet. It’s very essential to keep your seed-phrase safe. Without it, you lose access to your wallet and lose your assets.
If you want to buy and sell NFTs without third-party involvement, you need a wallet tied directly to the blockchain. This allows the currency to be transferred directly between people using the public key.
Whichever crypto wallet you select should ideally be compatible with the Ethereum blockchain, since that is the network on which most NFTs are sold, and Ethereum is also known as ETH. Although not all NFTs markets work on ETH, some NFT project work on the Solana blockchain (SOL) and Aptos blockchain (APT).
Once your wallet is connected and funded, you can start buying NFTs. Whenever you buy an NFT, you gain ownership in the sense that it becomes your property.
Most NFT marketplaces fall into one of these three categories:
- Open marketplace
- Closed marketplace
- Proprietary marketplace
Many NFT marketers create accounts on and subscribe to a variety of marketplaces in other of receiving announcements about new NFT drops, information about new NFTs is also shared on platforms such as Twitter and Discord.
EXAMPLES OF NFT MARKETPLACES
There are many marketplaces for NFT. Example include: