What Are NFTs and How to Buy Them
NFTs Explained
When we say non-fungible, we’re referring to something that is one of a kind and irreplaceable – like that heirloom ring that has been passed down in your family for several generations or a family painting made by your grandpa.
This is in contrast to fungible items, which are basically things that can be exchanged for something with equal value. For example, your $100 bill is fungible because it can be exchanged for another $100 bill or five $20 bills and so on, and the value remains the same.
When we talk about NFTs, we are talking about unique digital items such as artworks, in-game assets, virtual properties, collectibles, music, etc. Within these items are specific unit of data stored in a digital ledger that uses blockchain technology to establish proof of ownership.
How do NFTs work?
Like any other piece of property, NFTs can be bought or sold, and because they are one-of-a-kind, their value can shoot up depending on the demand.
Yet while this may be the case, some would still argue there’s no point paying so much for an NFT when you can easily get a copy or a screenshot of the said item since they all just exist online.
Fair enough, but not quite. Take for example the Mona Lisa painting. The real one sits at the Louvre Museum in Paris, France and is worth around $860 million as of 2020. Anyone can buy a picture of the painting for a dollar or so, but that doesn’t mean they now own the Mona Lisa.
The same goes with NFT artworks – you can view Beeple’s famous painting online, which at this point has been copied and shared countless of times. However, its ownership still lies with the person who bought it, which is recorded in a tamper-proof ledger called blockchain.
Other NFTs are treated more as a collectible, like virtual versions of the trading cards you’ve been collecting as a kid, while some NFTs are in-game assets that you can use to spruce up your avatar in a game.
At the end of the day, here’s the thing about NFTs – they can come in many different forms but at its core, they are designed with an element that can’t be copied – ownership of the item.
As an owner of an NFT, you have the power to keep or sell them in secondary markets as you see fit, regardless if you want to continue using the platform where you got them or not.
Say you got a limited-edition weapon from a blockchain game you’re playing. If that weapon is an NFT, that means you can sell that asset in a third-party market like Opensea should you wish to stop playing the game and wants to liquidate the value of the assets you’ve accumulated over all those times playing.
How to Buy NFTs
NFTs intertwine with cryptocurrencies at one point or another so it’s important that you have at least a basic working idea of what cryptocurrencies are and how they work.
That being said, you need to have a digital wallet such as MetaMask, Binance, or Coinbase to store your cryptocurrencies in order to buy NFTs.
Once you have your digital wallet, top it up so you can purchase the cryptocurrency that you need to buy your preferred NFTs. Once done, connect your digital wallet to the marketplace where you plan to buy NFTs, such as OpenSea, Rarible, SuperRare, and NBA Top Shot Marketplace, among others.
Some NFTs are sold through auction thus you must place a bid for it if you want to buy it, while others are sold for a set price.
Key Takeaway
The beauty of NFTs is that it empowers everyone to have true ownership over digital items, and provide an avenue for anyone to earn.
For the gamers, playing play-to-earn games that lets them earn NFTs could be a way of augmenting their income. For the artists, making NFTs of their art could financially support them and their craft. For the collectors, chancing upon a super rare NFT card could be a dream come true.
This is just the beginning, and with blockchain in the picture, we have yet to see the full potential of NFTs. To learn more about cryptocurrencies, NFTs, and digital assets, sign up now for a trading account at 1Market.