In recent times, there’s been a subject of increased interest in the cryptosphere — NFTs. I guess you’ve heard about NFTs, that’s if you’re not totally new to the blockchain and the cryptosphere. Inasmuch as many people are interested in this fast-growing concept, just a few know in-depth what NFTs are.
In this piece, I’ll walk you through the concept of NFTs; guess it’s a nice day to talk about something as thrilling as NFTs.🥰😁
What are NFTs?
Non-Fungible Tokens simply referred to as NFTs are any digital assets encoded on a blockchain. They literally can be anything, a piece of music, a poem, a work of art, just anything.
To understand fully what NFTs are, one needs to start at the root word Fungible which means in other words exchangeable. Fungible tokens are items that can be exchanged and traded one for another. A major example are fiat currencies, also cryptocurrencies like Bitcoin and Ethereum fall into this category.
One dollar bill in the US, is the same as one dollar bill elsewhere, both have same value; same is the case with cryptocurrencies like Bitcoin and these fungible tokens can be exchanged differently for the same value. Whereas, Non-Fungible Tokens are unique and cannot be exchanged one for another or for the same value.
NFTs can be very confusing for most persons especially those new to the cryptosphere; gladly, at the end of this article you’ll understand the full concept of NFTs.
An NFT utilizes the technology of the blockchain. This is the basic feature that sets it apart from any random digital piece on the internet. This simply implies that a digital asset recorded, verified and stored on the blockchain becomes an NFT.
For all the newbies, that should be sorted out now.🥰
Origin of NFTs
The origin of NFTs go as far as 2014, although most say it popped out of nowhere due to its sudden popularity. NFTs made top news in the cryptosphere and spiked people’s interest early this year when an NFT video by an artist known as Beeple resold for 100 times more.
Another jaw-dropping instance was an NFT sale of $69.3 million in March, a collage of Beeple’s art called Everydays — The First 5000 days. This greatly increased the interest of people in NFTs. Matter of factly, this year’s record of NFT sales beats the summation of sales from previous years. Thrilling isn’t it?
What makes an NFT valued and so profitable? This is one of the most asked questions regarding NFTs and I guess you’re wondering same too. As this isn’t a Yes or No question, the characteristic features of NFTs concisely explained below answers that.
Features of NFTs
The following are the basic features of NFTs
Non-Interchangeable — NFTs are unique and distinct in themselves, as such one NFT can’t be exchanged for another.
Indivisible — NFTs doesn’t have smaller fractions like Bitcoin or fiat currencies that are Fungible Tokens. They are whole pieces and are valued as such.
Authentic — NFTs utilizes the technology of the blockchain, this helps authenticate each item thus eliminating the problem of fakes.
Verifiable — The proof of ownership of an NFT is stored on the blockchain this helps verify ownership and eliminates fraud especially in the the case of a sale or transfer of ownership.
Concluding Thoughts
The features explained above are the core features that make NFTs different from Fungible tokens and other digital assets and also makes it a very profitable form of investment for most.
Despite these, one cannot guarantee if an NFT will be valued and highly priced. However, trends show NFTs to be more profitable in future; thus, capturing the hearts of many more.
