Blockchain technology has made headlines around the world along with the crypto revolution and newfound support of media, business, and the public sector. Thanks to the adaptability and innovation of blockchain design, there are many new blockchain-based solutions that emerged on the market.
NFTs represent the latest innovation in the crypto market and a rising trend that attracted a worldwide audience. Below, we will take a look at NFTs as innovative technology and their main advantages.
What is NFT
NFT is short for non-fungible tokens. Before we explain what NFTs are, it’s good to know the distinction between fungible and non-fungible tokens. Cryptocurrencies like Bitcoin are fungible tokens in the sense that they can be replaced with other BTC, and you will end up with the same digital assets.
But, NFTs can’t get replaced by another digital asset, even of an equivalent type. In other words, every NFT that has been created is a totally unique and individual digital asset.
The first NFT was developed on the Ethereum blockchain network, and typically, you will find most NFTs on the market are powered by Ethereum’s blockchain because it offers a unique opportunity for users to create Dapps, for example, and their own blockchain projects based on Ethereum’s blockchain technology.
So, back to the first NFT token, it was developed by Nick Johnson, called ERC721, and its primary function was to offer an option for users to have digital proof that they possess assets on Ethereum’s blockchain. As the NFTs are not interchangeable, by purchasing one, you are the sole owner of it, or you can also purchase a fraction of certain NFTs.
How to Obtain NFT
If you’re looking to obtain an NFT, our advice is to do your own research as there are many different types of NFTs and to find a reputable NFT marketplace where you can make purchases. This is a thorough guide to buying NFTs that will help you make better decisions and find reputable NFT marketplaces.
It’s also worth mentioning that you would need a crypto wallet, specifically a crypto wallet that supports Ethereum, in order to make purchases on an NFT marketplace. Fortunately, there are many options when it comes to crypto wallets, including web, mobile, as well as desktop, and hardware wallets.
Why NFTs Are Popular
Although there are different types of NFTs, including music, articles, trading cards, video games, NFT’s popularity is mainly associated with digital art nowadays.
The hype around NFTs is set around the option to purchase digital art and to benefit from, in the case that its price goes up. In other words, investing in NFTs is similar to investing in other speculative assets as it represents a new form of art collection because you have a blockchain record that proves you own, for example, specific digital stickers.
Otherwise, NFTS hold the potential to be used in other markets, like the real estate market, because it directly connects buyers and sellers. Moreover, in retail and the fashion industry. One example would be Nike, which has created a process based on NFTs to verify the authenticity of its products.
In conclusion, NFTs show a lot of potentials to be used in a variety of other industries besides art collection. However, we are yet to see how the NFT marketplace will develop as we mentioned, it is a distributed marketplace, and there are multiple platforms where you can purchase different NFTs; that being said, it is up to you to recognize the potential of the digital assets and to invest in assets that make sense to your budget, fit your financial goals and preferences.