NFT is trending right now: What are they? And why are they so popular?
You might hear of people who spend thousands of dollars to buy an NFT like a digital cat, a piece of music, or a Pokemon card and you still have no clue what NFT is and why it has become a trend? No worry, in this article, Tokenize Xchange will help you to catch up with the latest trend on Blockchain technology with a closer look at NFTs.
What is NFT?
NFT – standing for Non-fungible token is a type of digital asset that uses blockchain technology to create a unique unit of data that represents an unreplaceable item. An NFT can be anything, from music, artwork, basketball cards, or even a tweet.
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There is a misconception that NFTs are a kind of cryptocurrency. The similarity between cryptocurrency and NFTs is that they are both based on blockchain technology. However, the key difference between these conceptions is fungibility. A fungible item can be replaced by an identical item at the same value, for example, an ETH can be exchanged with one ETH. In contrast, a non-fungible item has a unique value and cannot be replaced for another item with equal value.
NFTs can be used to issue digital items as well as unique cryptocurrencies. These tokens can be a collectible, an investment product, or something else.
NFTs can also be implemented in-game item production. Most online games already have their own platform for players to buy and sell, though, applying blockchain technology to create in-game goods would be a big step forward in this potential economy.
Moreover, NFT can be used to denote the virtual ownership of a real-world asset. These NFTs can represent fractions of real assets, backed by an underlying physical asset, completed with warranties, insurance, and regulation to create trust in trade, then stored and traded as tokens on the blockchain.
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Why NFTs become a technology trend?
NFTs can be purchased within online auctions by USD or cryptocurrency. NFT has recently become trending after several NFT digital artworks have been sold. The recent participation of many celebrities and business leaders in the market also contributes to the popularity of non-fungible tokens.
Rock band Kings of Leon released their latest album as a collection of digital NFT. Mike Winkelmann, a graphic designer, has published her digital NFT art on the Nifty Gateway e-commerce platform, getting himself millions of dollars. Musician Claire Boucher, the girlfriend of Tesla CEO Elon Musk, sold her NFT artwork for $6 million.
In the social media industry, the project BitClout is providing users with new and innovative ways for social media celebrities, fans, and peers to monetize their influence. In BitClout, NFTs are used to create Creator Coins that represent popular individuals such as Tesla CEO Elon Musk or famous Youtuber Logan Paul.
Not limited to digital artworks, or social media, NFTs are also applied in the fashion world. Gucci recently started selling their digital sneakers, which can only be worn within an AR environment, at $12 a pair. This move from Gucci has allowed fans to engage with the brand they love by getting themselves unique fashion items in the AR world. It shows a huge opportunity for high-fashion brands to apply blockchain technology and digital ecosystems
Where to buy NFTs
NFT marketplaces are platforms where you can buy, sell, store, and display NFT. In other words, the marketplace is like an e-commerce platform where buyers and sellers are advertising, purchasing, and selling their goods.
If you are looking for a platform to start trading, or even create your own tokens, check out the list below for the top 5 NFT marketplaces:
How to start trading in the NFT marketplace
Below are some requirements to participate in a marketplace and start trading NFTs.
Register a user account
To start trading, you would need to sign up for an account on an NFT marketplace.
Have a cryptocurrency wallet
Since NFTs are products based on blockchain technology, users will need a crypto wallet that is matched with the blockchain network that supports the NFTs they want to trade. For example, in order to buy an NFT built on the Ethereum blockchain, you will need an Ethereum wallet such as MetaMask to start trading.
Holding a number of crypto in the wallet:
Before purchasing, you need to hold some digital tokens in your crypto wallet. Don’t forget to find out the digital coins supported by the marketplace you intend to join.
So, what do you think of NFTs? Are you owning any NFTs yet? Don’t hesitate to tell us and keep following Tokenize Blog for more market news and technology trends!
Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.