All you need to know about NFT’s
What is NFT? What is a Token? What is blockchain? Where and how can I buy NFTs?
If you are active on social media, if you spend time on Twitter, Instagram, LinkedIn, Youtube, or any other social media then you would have heard something called NFT
NFT is an abbreviation for Non-Fungible Tokens.
If we break this into two parts, we have Non-fungible and tokens
Let’s start with Non-Fungible first
Anything that cannot be replaced or is only one of its kind is known as “Non-Fungible.”
If I would have to simply express it then, I would replace the word fungible with replaceable, which makes it Non- Replaceable.
Let’s take the example of the portrait painting of the Mona Lisa; it is a unique creation by Italian artist Leonardo Da Vinci.
Can you paint another painting that exactly matches the painting of the Mona Lisa?
Let’s say you are a great painter, and you can depict it, but can your painting match the level of the original painting of the Mona Lisa? Not at all because it is one of a kind and will remain so.
Another simple example can be of a famous book, let’s say ‘Rich dad Poor Dad’. We all must have heard about this book.
There are millions of copies of this book, Right?
As this book has been mass-produced, every copy of this book would be the same. If you buy a book from any online store or any retail store, there would be no difference in them. This signifies that the book is replaceable.
But suppose, you own a copy of the book which you have read. And while reading you have highlighted many things, you have put in a lot of post-its, which means this particular copy of the book is not replaceable.
No one can buy this copy of the book from anywhere else because it contains your notes, your highlights, your scribbles which makes this book non-replaceable. This book is only one of its kind.
Similarly, you can think of many examples now. You can imagine a bike or a car that has only one unit or is manufactured in a limited edition which is different from mass-produced cars.
You can imagine a specific phone, a specific watch, a specific image, it could be anything, something that is unique and is non-replaceable.
Now let’s focus on the concept of Tokens.
What are Tokens?
You and I are pretty familiar with this. It can simply be a piece of paper, metal, or anything that is sometimes used instead of money, but not everyone has it like money. If we understand it in a simple language, then with money, we can buy anything sellable, but with a token, we can buy only that thing for which the token is made.
We all must have visited any game zone in shopping malls once in our lifetime. Do you guys remember we use to get coins or cards in exchange of money, to play the games.
These coins or cards can be termed as Tokens and can only be used to play games in that game zone and for nothing else.
Tokens are basically riding on something called Blockchain.
What is blockchain?
Don’t be frightened by the technical jargon that most people use to describe “blockchain.” A blockchain is just a database. It isn’t a particularly sophisticated one, either – you could create it in a spreadsheet with minimal effort.
There are some peculiarities with these databases.
The first is that blockchains are append-only. That means that you can only add information – you can’t just click on a cell and delete stuff that you’ve already added, or change it in any way.
The second is that each entry (called a block) in the database is cryptographically linked to the last entry. In plain English, each new entry must contain a sort of digital fingerprint (hash) of the last one.
And that’s it! Since each block points back to the last one, you end up with a chain of blocks. Or – as the cool kids like to call it – a blockchain.
Now how is this concept of Blockchain is related to NFTs
let’s come back to your book, it’s a special book where you have your highlights, your notes, and that is why this book is only one of its kind. If you want to sell this book to someone and you want to sell it at suppose 2000 rupees, if that person wants to own this book there should be a way to prove that the person owns this book.
Now, this is a physical book, but what if it was an image? What if it was a movie clip? What if it was a poster? What if it was a song?
How do you prove the ownership of that unique product? It is by creating NFT.
This is how NFTs work. They are a legitimate way to transfer ownership of digital assets, even physical assets in such a way that your ownership would always be on record which can never be edited or deleted.
Why NFTs are so valuable?
There’s a saying – “Supply & Demand drives the market”.
Due to their unique value, NFTs are scarce. And because of its scarce nature, its demand is high among collectors, investors, gamers, and people with golden treasuries.
Still, why do people dig NFTs that much?
NFTs can sometimes make you a millionaire. If you play your cards smartly, it can make you a lot of money. Here’s an example:-
A gamer on ‘Decentraland’ (Virtual land platform) purchased 64 lots together and combined them into a single estate. It’d be hard to believe, but that land he combined got sold for $80,000 just because of its desirable location & road access.
Here’s another one:-
An investor arrayed $2,22,000 & purchased a section of a digital Monaco racing track in the ‘F1 Delta Time’ game. Now, that NFT earns a 5% dividend to him, because of all the races that take place on it. Plus, the investor gets a share of the entry ticket fees as well.
Where can you buy Non Fungible Tokens?
NFTs can be bought on a variety of platforms depending on what is it you want to buy. For example, if you are interested in buying baseball cards, then ‘digital trading cards’ would be a great marketplace for you.
But before you lose even before the race begins, you need to understand how the transaction works here.
You’ll need a wallet specific to the platform you’re interested in buying on, and that too topped up with money in the format of cryptocurrency. Because, as the sale begins, a herd of frenzy buyers will crush your chance to buy an NFT if you are not already prepared with the right resources to make the transaction successful.
How is NFT Traded?
Certain platforms have been developed to buy or sell NFTs, among which Rarible, Open-Sea, and Binance are popular, where buying and selling of NFTs are considered safe.
Although buying or selling NFTs is different from a simple buy/sell. You must have a digital wallet to buy or sell NFTs.
Now let’s say you are buying an NFT of a painting. Will you get that original piece of painting? No, you will receive a certificate of NFT instead, which will be linked to blockchain technology and ensure that you are now the owner of the NFT of that painting.
But, can you purchase an NFT with currencies like USD, EURO, or INR?
Nope, Any NFT you want to buy, a certain price is marked below it, and you need to have the same value of Ethereum in your wallet to buy that NFT.
This implies that the currency suitable for buying and selling NFTs is Ethereum.
Here are the top 3 NFTs Sold So Far
- Pak’s The Merge: $91.8 Million
This was the most expensive NFT to be sold, it was sold on 2nd December 2021.
- 2. Everyday: The First 5000 Days: $69.3 Million
This was the second masterpiece NFT sold by Beeple, Let’s not forget Beeple’s crossroad NFT was also on-trend before. He is surely ruling the NFT market.
- 3. Beeple’s Human One: $29 Million
Human One was also created by Beeple, which was sold on 9th November 2021 at a whopping amount of 29 Million USD.
Other top sites to shop Non Fungible Tokens:-
- Nifty Gateway
- NFT ShowRoom