With NFTs or non-fungible tokens making waves with huge sales, here are 7 facts that you should know about NFTs. Let's check the facts and clear up some misconceptions.
What is an NFT?
An NFT is a cryptoasset representing something unique and collectible using blockchain technology. The NFT could be in demand because it has been created by a famous artist or composed by a world-class musician.
Simply put, a non-fungible token cannot be faked or copied. One bitcoin is equal and tradeable for another bitcoin. The First 5000 Days by Beeple, sold for $69 million on 21 March is not interchangeable as only one exists, but its authenticity is guaranteed by blockchain technology.
What are NFT's use cases?
NFTs come in all shapes, sizes, and even use cases. Purely collectible digital art NFTs are pretty limited in what you can do with them.
Still, some NFTs have actual uses in games, like the famous CryptoKitties on the Ethereum blockchain. In this case, a collectible cat can breed to pass its traits down onto new cats.
NFTs are commonly used by financial platforms too. There is a massive market for PancakeSwap’s NFTs that are artistic and convertible into cryptocurrency. This unique combination means that people can speculate on the future price of the cashable amount.
How is the rarity and value of an NFT determined?
How is the rarity and value of an NFT determined? Determining how much an NFT is worth depends on what it represents. When it comes to crypto art, we need to think about who created it and the artistic value of the piece.
For game-based NFTs, you can get financial benefits. If the item give an extra $100 in staking rewards, then they are worth at least $100 without taking into account its artistic value.
Where can you find NFTs?
Where can you find NFTs? NFT marketplaces have non-fungible tokens on sale, from both famous artists & amateurs. See this list for the top ones.
The number of marketplaces keeps growing, and some are more specialized than others. If you are interested in buying something, make sure to check and see how genuine the marketplace is.
How do you verify the authenticity of an NFT?
How do you verify the authenticity of an NFT? Proving that your NFT is legitimate can be a bit tricky, depending on what you’re looking for. you may have to get in touch with the artist to confirm they are selling NFTs of their work.
I hope you've found this simple explainer useful. Cheers!
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I believe in blockchain technology because it is very secure, traceable and reliable. For example, I read that many people are trying to fight fraud in the NFT market, but not everyone is successful. Clearly I think that over time tokenized assets can become an irrefutable sign of authenticity and, for example, this site https://wakweli.com/ can increase the reliability of blockchain asset transfers by creating a standard of trust in the ecosystem.