One of the latest cryptocurrency buzz words, non-fungible tokens (NFTs) are becoming more and more widely discussed and utilized outside the little blockchain community. As we’re seeing numerous examples of celebrities and artists selling beyond just digital artwork, the general audience is becoming curious about what these NFTs are and learning how to make money from trading, selling, and buying them, often by using cryptocurrencies.
Before predicting what the future for non-fungible tokens holds, let’s take a look at what they are and how they are solving all the issues around digital art.
What are NFTs?
Simply put, non-fungible tokens transform digital artwork and other collectibles into unique, verifiable assets that are traded easily on the blockchain. Due to NFTs, many artists and influencers are selling their art, GIFs, tweets, in-game goods, and anything else that might be of value to someone, and profiting when investors spend their money on their NFTs. For instance, the co-founder of Twitter sold his first tweet for $2.9 million.
When talking about celebrities NFT, the video of the basketball superstar LeBron James was sold for a bit over $200,000. There are already countless examples where NFTs brought a huge amount of money to many individuals who were selling their art or collectibles, not just investors. As much as non-fungible tokens are quite popular these days, they are not that new. One of the original NFTs was CryptoKitties, launched in 2017, a digital trading game on Ethereum allowing people to purchase and sell virtual cats.
What’s necessary to point out is that non-fungible tokens are unique in their digital form, however, they don’t need to be unique in their existence. In other words, many NFTs are just digital forms of something that already exists.
What are the benefits of NFTs?
The reason why non-fungible tokens are taking off now as a phenomenon is that on one side, we have people interested in supporting the artists by purchasing their art in a digital form, and on the other side, we have those who are intrigued by the idea of copying and claiming ownership of a non-fungible token.
The primary benefit of this exciting, groundbreaking technology lies in its ability to prove ownership. Because the NFT service is on a blockchain network, they can help in linking ownership to a single account. Also, they are not distributable and cannot be shared among multiple owners.
Another great benefit of non-fungible tokens is authenticity as they depend on their own uniqueness. As already mentioned, NFTs are produced on the blockchain, so they are always linked to unique data. If NFTs producers desire to create supply scarcity, they are able to release a limited quantity of NFTs as well.
Besides ownership and authenticity, NFTs are also transferable which is completely revolutionizing gaming. Once players purchase in-game objects, they are able to sell these objects if they no longer need them or even use them outside the game. As NFTs are built on smart contracts, transferability is quite important for them as well because it simplifies ownership transfers between the buyer and seller.
Without a doubt, non-fungible tokens are one of the most relevant developments in digital commerce. Whether you’re interested in purchasing a certain type, such as an NFL non fungible token, or simply selling your own art or collectibles in a digital form and profit from it, NFTs are an exciting environment that is still evolving. Taking into consideration all the benefits we can see already from NFTs, we can only expect it to have a bright future for everyone who will want to participate in it, while also being aware of the limitations it brings along.
Founder Dinis Guarda
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