Essential NFTs concept for a beginner
Introduction
We are going to cover some NFT concepts you must understand if you are entering the NFT space. We talk about what a NFT is, How they are created, What gives them value, Advantage and Disadvantage of NFTs
What is an NFT
NFT stands for Non Fungible Token. It is a token or a digital asset that cannot be replaced.
For example. You want to buy a shoe that's worth 20$, and you have 2 20$ bills in your pocket at the time. It does not really matter which 20$ bill is used to buy the shoe, because the 20$ bill is interchangeable or fungible. But a NFT is a special item that cannot be replaced or interchanged
How NFTs are created
NFTs begin as digital files, such as an image or a video. That can be created with photo or video editing tools like Photoshop, Photopea e.t.c. NFTs can also be generated with computer programs
After the digital file has been created, it is hosted on a NFT market place such as OpenSea, Rarible and Foundation. You can create your own NFTs collection and sell it on a market place.
What gives an NFT value
The value of NFT can be measured by its property. Each property of an NFT has more rarity than some of the other properties, so the NFTs with the most rare property become more valuable than the ones that have less rare property. Consider a NFT of a bag. There are five properties: the zip, the handle, the logo, the color, and the background color.
NFTs that provide benefits such as yacht parties, access tokens and club membership. These functional NFTs are of greater value than ordinary and ordinary NFTs.
Consumer interest drives the value of an NFT. The rarity and base of interested consumers influence their worth.
Advantages of NFT
Gives artists ways to earn money
They can be used to prove the ownership of an asset
They give a sense of belonging to a community
It provides collectors a secure, digital way to store their collections
Disadvantages of NFT
NFTs live on the blockchain which consume a significant amount of electrical energy.
NFTs has led to fraudulent practice: copyright infringement, e.t.c