If you’ve seen thousands of social posts, articles, and ads about NFTs or non-fungible tokens, you’re not alone. Unfortunately, a vast majority of people still don’t understand what NFTs are. In today’s article, we tell you how NFTs work and why you need to know more about them.
- NFTs are digital assets that are unique and come in the form of art, music, videos, and more
- NFTs are often bought and sold using cryptocurrency
- About 360,000 people own NFTs
- Around 10% of NFT owners own 80% of the total value of NFTs
- To buy an NFT, visit the best NFT marketplaces
What Are NFTs?
NFTs are digital assets that contain data and inhabit the blockchain. They can come in the form of music, art, videos, in-game items, etc. NFTs are often sold and bought online using cryptocurrency. They are usually encoded with the same software as various cryptocurrencies.
How Are NFTs Different From Cryptocurrencies?
The main similarity cryptocurrencies and NFTs have is that they are both built using the same type of programming. In other words, NFTs are built the same way as Ethereum and Bitcoin, for instance. That is where the similarity between these two end.
Cryptocurrencies as well as any type of physical money can be exchanged for one another; i.e., they are fungible. They have equal values, meaning one dollar always equals one dollar just like one BTC will always equal another BTC.
NFTs, as their name suggests, are not fungible and thus are different from cryptos. Each NFT has its own digital signature. No two NFTs are equal and they can’t be exchanged for one another.
How Many People Own NFTs?
There are currently around 360,000 people who own NFTs. About 10% of the NFT community own 80% of total value in NFTs. In other words, over 2.5 million NFTs are owned by only about 32,000 people.
How Do NFTs Work?
All NFTs exist on a blockchain, which is a distributed public ledger used for recording transactions. Even though various blockchains support NFTs, they are usually held on the Ethereum blockchain. Each NFT is created from digital objects that represent items such as:
- Graphic art
- Video game skins
Even tweets can count as NFTs. The co-founder of Twitter Jack Dorsey's first-ever tweet was sold as an NFT for almost $3 million dollars.
What Are NFTs For?
NFTs provide content creators and artists with a unique opportunity for monetization. For instance, artists don’t have to rely on auction houses and galleries anymore if they want to sell their art. They can sell their work directly to the consumer as an NFT, and keep more of the profits as well.
How To Purchase NFTs?
If you are planning to buy an NFT and start your own collections, there are a couple of things you need to acquire first. First, you need a digital wallet to store cryptocurrencies and NFTs. Once you have that, you usually have to buy some cryptocurrency like Ether. Then visit an NFT marketplace like OpenSea to browse and buy your own NFT.
Can Anybody Make NFTs?
Yes, anyone can make NFTs and sell them on the blockchain. There are multiple online platforms that make creating NFT very simple and straightforward. But that doesn’t mean you should create an NFT to sell as fast as possible.
Although the competition is not too fierce, it definitely exists. Some of the platforms mentioned above don’t require crypto ownership. Still, most of them come with fees that you need to check out before you decide anything.
All in all, NFTs are definitely something you should learn more about. They come in various forms, including GIFs, music, art, video game skins, collectibles, and many more. They can be purchased, sold, and even made by anyone.
Although there are a lot of people who still have much to learn about NFTs, participation in the NFT market as well as NFT ownership has doubled over the past year. As of now, there are around 360,000 people who own NFTs and about 10% of them own 80% of the total NFT value.
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