If you’re a cryptocurrency beginner, one of the latest advancements in crypto has probably gone right over your head. NFTs, or non-fungible tokens, are revolutionizing cryptocurrency and creative expression. If you’re a total newbie to cryptocurrency as a whole, catch yourself up on what crypto is and how it works.
We’re going to get into the 4 most basic concepts necessary for understanding the world of NFTs.
1. What Is an NFT?
NFT stands for non-fungible token. Right off the bat, that doesn’t clear much up for a self-described cryptocurrency beginner. Non-fungible essentially means unique. A helpful way to think about it is like an autograph. An autograph, depending on who it belongs to, has a certain amount of value. That value may increase or decrease as it gets passed from one person to the next. You also can’t replicate an autograph, even if it was your signature to begin with.
This kind of how an NFT works.
When a seller puts an NFT on sale, it has a certain amount of value. Perception and how much the current owner of an NFT is selling it for can determine how successful it will be. Like an autograph, an NFT is only worth how much someone will pay for it.
2. NFTs Are Revolutionizing the Art World, But They Don’t Have to Be Art
An NFT can really be anything as long as it’s posted to the blockchain and has a unique digital signature. The real hype, though, comes from how NFTs are rewriting the story of digital art creation.
Not only do NFTs open doors for how digital art is sold, but also for how much it can be sold for. In fact, Beeple sold the most expensive NFT ever for a mind-blowing $69 million. Before NFTs, it could be incredibly difficult for digital artists to get proper credit and payment for their work.
However, NFTs don’t have to be digital art. CEO of Twitter Jack Dorsey sold a tweet as an NFT for almost $3 million. Anything you can upload to the blockchain as an NFT has the ability to sell as an NFT. NFT’s are clearly a major step forward in the digital art world, but they are also just a really cool advancement in the world of crypto.
3. The Difference Between an NFT and Normal Digital Files
Since NFTs are digital art, you may be wondering why you can’t just download the file like any other file. It’s just a picture , right?
The answer is, you can take a screenshot or download the image to your device the way you would any other file. The original artist or seller still has ownership regarding copyright and any other legal ownership over the art. NFTs give ownership to the buyer in a different way. Similar to if an artist sold a physical art piece to a buyer, the buyer now has ownership of the piece. However, the artist has copyright and reproduction rights. You could take a picture of the piece in the buyer’s home, but they still have ownership.
Buying an NFT is like buying an art piece from the original artist. The NFT is now available in their crypto wallet, the way an owner of an art piece would have it hanging in their home.
4. How to Buy an NFT
To buy NFTs, you must have a crypto wallet and some crypto saved up to make a purchase. The most common blockchain used for NFTs is Ethereum, but it’s definitely not the only option.
Since they first arrived on the scene, NFTs have really taken off. If you’re looking to get into NFTs as a cryptocurrency beginner, there are all sorts of avenues available. We suggest keeping up with your favorite digital artists who may be producing NFTs if you’re interested in getting started!
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