NFT (Non-Fungible Token) is a blockchain-based digital asset that became the focus of worldwide interest in the crypto world due to its value ranging up to tens of millions of dollars. Nowadays, the most favored form of it is digital works, everything from photographs, videos, to in-game assets and digital paintings. Most NFTs run on the Ethereum blockchain. If you want to fully grasp NFT, you have to pay attention to a couple of key words in its name – “fungible”, which is derived from “fungibility”, and the word “token”.
Fungibility: the ability of an asset to be exchanged/substituted for another identical asset of an equivalent value. For example, you can exchange one 10,000 banknote for two 5,000 banknotes, and their value will remain the same.
Token: the digital asset representing goods, services or other forms of monetary value.
Hence, there is a non-exchangeable digital asset which is a precious object. NFTs take different forms depending on the creator’s goals. Also, each NFT transfer is recorded on the blockchain. The metadata contains details about the creator of the NFT, its price, as well as the past history of its ownership.
How does NFT differ from cryptocurrencies?
As such, NFT is an asset that was born out of cryptocurrencies. Nevertheless, its purpose, form and usage are quite different from traditional crypto, such as Bitcoin. NFT cannot, however, be subdivided into smaller denominations, like satoshis in Bitcoin. They exist exclusively as a whole.
The unique characteristic of NFTs is that it works like a fingerprint which makes it easy for the system to verify ownership. The owner or creator may also store certain information in it. For example, creators can embed a signature on their artwork by inserting it into the NFT metadata.
In addition, the ownership of NFT is absolute, meaning that it can only be owned by one person at one time. However, this does not mean the rights of the creator is void as the data still shows the original creator.
Also, you can buy crypto on the crypto exchanges or exchangers, while NFT is mainly bought on dedicated platforms, which we describe below. Would you like to trade in cryptocurrency to buy NFT using it, then we recommend using our trading bot. It trades on a pre-made strategy so that it can bring passive profits to you.
Why NFTs become so popular
NFTactually became popular in 2017, when CryptoKitties launched. CryptoKitties is a blockchain-based game that utilizes the Ethereum network. It is a game where players adopt, breed, and trade virtual cats. Since then, NFTs popularity stabilizes. The market suddenly exploded again in late January 2021.
For enthusiasts and users, NFTs represents a new era of the digital collection. It is a new way to support artists, athletes, and musicians without any third-party intermediaries. For creators, artists, and musicians, NFT is a new way to share and monetize their work, especially if it is some digital art. There were a lot of issues and concerns surrounding the sale of digital products as it was very easy to copy and claimed by others. NFTs also allow many digital artists to profit directly because there are no cuts from record companies, distributors, publishers, or other third parties.
Currently, the popularity of NFTs is still limited to arts, hobbies, and entertainment industries. However, many observers of the crypto world have seen the great potential of implementing NFTs in many sectors and industries.
What can you do with NFTs?
Artwork Industry. The characteristics and uniqueness of NFTs can potentially reshape the digital art landscape. NFT images or even bigger artworks are powered by blockchain technology. Blockchain technology provides a guarantee for artists in the form of verifiable ownership of their work. This is an innovation for digital artists who have always struggled against plagiarism and creative theft.
Additionally, the smart contract system also allows artists to write down the percentage of royalties they will get each time their work changes hands. The price of NFTs can also reach very high numbers.
NFT in a business context NFTs can link physical assets such as proof of ownership of a house or other property to a blockchain network. In the case of small items of value, such as jewellery, an NFT can be an easy-to-verify legal proof of ownership. You don’t have to worry about valuable certificates being lost or stolen because the ownership data is in the blockchain.
Unfortunately, the implementation and development of NFTs are still limited to a relatively small market. However, as the popularity and trust grew, its application in business will become more widely accepted.
Sports and fashion industry NBA Top Shot is the first NFT to enter the sports industry through collectible cards, where fans can collect footage of key moments from their favourite matches. Belgian soccer league Jupiler Pro League has partnered with gaming company Ubisoft and startup Sorare to launch a fantasy soccer game using NFT as a digital collection.
In addition, in the fashion industry, Nike patented the CryptoKicks authentication system in 2019. Every purchase of a custom shoe will generate an accompanying NFT with unique information about the item including material, place of manufacture, and more. The owner of CryptoKicks can then combine his digital shoe design with other digital shoes to ‘breed’ a pair of shoes that can be purchased in physical form.
These two cases prove that NFTs can increase consumer engagement and open up new digital markets for the sport and fashion industries.
Hobby and entertainment NFT opened the market for digital collectibles which turned out to have great potential. Currently, collectible goods dominate the NFT market. Snippets from the NBA Top Shot, virtual cats from CryptoKitties, and unique avatars from CryptoPunks are some of the most popular NFTs. Items from all three platforms can cost up to millions of dollars.
List of NFTs By Market Capitalization
- Axie Infinity (AXS) Axie Infinity is a blockchain-based game that combines elements of NFT, gaming, and DeFI. The game is inspired by Pokémon and Tamagotchi in which players must collect, breed, raise, battle and trade token-based creatures known as Axies. Each Axie is an NFT that has its own unique attributes.
- Sandbox (SAND). The Sandbox is a blockchain-based game that focuses on utilizing NFT in its various game assets. In Sandbox, you will play in a world metaverse and interact with other players. The Sandbox cooperates with many big companies such as Atari and even the metal band Avenged Sevenfold.
- My Neighbor Alice (ALICE). My Neighbor Alice is a multiplayer builder game, where anyone can buy and own a virtual island, craft items, and meet other players. It is inspired by games like Animal Crossing and combines virtual life elements with trading and collecting NFTs. ALICE tokens are used for various in-game activities including buying goods and assets on the Alice marketplace.
How to buy and sell NFT
Today you can buy and sell NFT in many marketplaces available across the digital landscape. As can be seen in the image above, these digital marketplaces offer NFT in various forms. The cryptocurrencies used to buyNFT usually depend on the platform we choose. For example, CryptoPunks, OpenSea and Rarible only accept payments using US dollar and ETH. In contrast, sites like NBA Top Shot give users the freedom to pay using fiat money or cryptocurrencies. Therefore, the first step to buying and selling NFTs is to have cryptocurrencies that match the marketplace you are aiming for.
Conclusion
NFTs made a stir in the crypto space. It caused a lot of enthusiasm among people who were not interested in cryptocurrency before. Moreover, renowned companies and clothing brands are also trying to keep up with the times and create new collections just in the form of NFT.
By now, you have an idea of what NFT is, how to deal with it, as well as where to buy it. In order to buy it with cryptocurrency instead of fiat, you have to find a right way to get it. The perfect solution is not simply to buy crypto, but to trade it. If you want to trade digital assets profitably and stay ahead of the curve, you might need an assistant. Our trading bot, doing almost all of the trading for you, is a good way to do that. All you have to do is customize it to your preferences.