What is NFT and What is Used for?

What is NFT and What is Used for

If you’ve been following the news, you’ve probably heard about NFTs—and if you haven’t, well, now’s the time to pay attention! and to get your attention more, I’ll start with shocking detail before answering the question “What is Nft

In 2017 Larva labs created their Nft collection called “Crypto Punks” and distributed them to their audience for free! As of today one Crypto Punk nft is worth a minimum value of $129.000 and even some rare ones sold over $ millions.

Wait, are you serious! — Yes, I am,

Crypto Punks What is Nft
Crypto Punks Largest Sales

No need to be upset tho, I didn’t know the term either and haven’t heard of the Nfts and Crypto Punks till the beginning of 2021. At that time it was hard to find good resources to learn, fortunately, you have this article now.

So, Nft term can be confusing to newcomers in the crypto world. What is nft? What is their use? These are some of the questions you may have, but be sure, in this article, you will find all of your answers.

In short, Nfts stands for Non Fungible Tokens. It’s blockchain technology applied to virtual goods that makes these unique items fungible.

Many people simply don’t understand what these tokens are and why they can become game-changer. We are going to take a closer look at this topic, try to break down complex ideas, and hopefully explain all the basic concepts everyone should know before entering the world of blockchain and owning a small piece of it.

In this guide, we’ll look at the meaning of Nfts, what makes these tokenized digital goods unique in the first place, and the difference between Non fungible and fungible tokes.

Let’s get started!

What is NFT and What is their use?

Non fungible tokens, or NFTs, are one of the hottest things in the blockchain industry today. And for good reason. Better yet, you don’t need to be a crypto-geek or an expert coder to understand.

What is NFT and What is their use

Well, basically an Nft is a digital token, but not just any other token (Eth, Bnb, Sol, etc.) These tokens are different because each token has its own unique characteristics and values.

They cannot be divided into smaller units and they cannot be duplicated or copied. Each token has its own unique identifier that allows it to be tracked through the blockchain network.

They are not like regular cryptocurrencies, which can be broken down into units that can be traded individually. NFTs are more comparable to collectibles like baseball cards or art pieces.

One of the most exciting aspects of NFTs is their potential to be used in a wide range of applications. Some examples include:

  • Collecting and trading rare items like digital artwork.
  • Providing access to unique experiences like concerts or sporting events.
  • Creating new forms of digital media such as video games or comic books.

Also, there is one major difference that makes me and all Nft space excited which is “You don’t need to be a developer to create an Nft

If you want to create your own digital token system like Ethereum, you need to be a developer and need to have hundreds of developers with you to build the system, but if you want to create an Nft, you don’t.

Anybody can create its own Nft and this special feature helped creators to finally take the control of their work. In a world where it’s easy to copy and distribute digital content, NFTs offer creators a way to prove ownership of their creations.

In addition to providing proof of ownership, Nfts can also help creators sell unique items at a higher price than they would have been able to.

What is the difference between Fungible and Non Fungible tokens?

What is the difference between Fungible and Non Fungible tokens

So first of all let’s define what is fungible and non fungible right. In this example, I’m going to use the BNB token to explain it.

Fungible tokens are basically cryptocurrencies that have no characteristic difference from each other. For example Bnb tokens. There are 200 million Bnb tokes right now and 1 Bnb is exactly the same for another 1 Bnb token.

Non-fungible tokens, on the other hand, have attributes to prove their uniqueness and clarify every Nft is different from each other.

Let’s go back to the Crypto Punks example, There are only 10.000 Crypto Punks on the Ethereum blockchain network. Every Crypto Punk is a token but they have specific characteristics.

First of all, they have images to identify them. Second, every token has a different image (one has a hat other has sunglasses, etc.)

Technically, the identifier is not their image because not every Nft will be an art form. The identifier is their attributes as a tag which makes it easy to identify and impossible to duplicate or replicate.

Overall, Fungible tokens, (Cryptocurrencies) attempt to function as currency by holding value or enabling the buying and selling of products.

Nun fungible tokens, (NFTs) produce one-of-a-kind units that can be used to demonstrate ownership and transfer rights over digital items. So I guess I explained the question What is Nft? properly, right!

I really thought a lot about it and tried to simplify the key differences so, bear in mind these are my definitions, not a technical explanation tho.

How do NFTs work?

Usually, we see the art form of Nfts on the news, especially after celebrities joined the club, bought some Nfts, and used them as a profile picture on their socials, Nfts started more popular day by day.

Because they will have many different forms it’s hard to explain how they work, but for you and only for you I’ll try to simplify the answer once again.

Non fungible tokens (nfts), or in other words digital collectibles, are used in several ways. The most popular applications are art and games, but they can also solve problems like the stock market and the real estate industry.

Many NFTs are produced and stored on the Ethereum network and some are also powered by other blockchains like Solana, Flow, and Tezos.

Because Nft ownership can be easily confirmed and tracked, as the blockchain is publicly visible, the person or organization holding the token can remain anonymous.

Nfts can help solve one of the biggest problems facing cryptocurrencies: how to track ownership of digital assets. NFTs are designed to be unique and cannot be copied or duplicated. This means that if you own one, it’s yours and only yours.

NFTs have many potential uses outside the realm of art. For example, a school may create an NFT for graduates, allowing companies to easily verify an applicant’s education.

Or, the real estate sector will use Nfts for proof of title deed, and alternatively, a big sports club may use NFTs to sell and track event tickets, which potentially reduces resale fraud.

How to buy an Nft?

How to buy an Nft
Source: Gilded

You can buy nfts with cryptocurrencies like Ethereum, Solana, Polygon, Tezos, etc. It’s not too hard to buy an NFT, but there are a few things you need to know.

First, you’ll need to have an account with a cryptocurrency exchange like Coinbase or Binance. You can open one of these accounts pretty easily, just go to the website and follow the prompts.

Second, you’ll need to purchase some cryptocurrency. The best place to do this is at an exchange like Coinbase or Binance, we recommend trying both in order to see which site works better for your needs.

Now you have some cryptocurrency and are ready to buy your first Nft. Even though there are many Nft marketplaces Opensea is the most popular by far and there are also others like Rarible, Foundation, SuperRare etc,

In the third step, you need to sign up at these Nft marketplaces, and to do that, you need a digital wallet like Metamask Wallet. These digital wallets allow you to store your Nfts so it’s a must.

If you’re not aware of digital wallets and don’t know anything about them no worries, I got you covered. Simply head over to our “What is Metamask Wallet” post and you’ll be fine.

Next, you need to transfer your cryptocurrency assets to your Metamask wallet and finally, you are ready to purchase your first Nft through Nft marketplaces.

Take your time, search all the marketplaces, check Twitter and Discord before you decide which Nft to buy, and try to find a trending Nfts and you are good to go.

By the way if you like, you can check our “How to find trending Nfts” article for more detail.

How Can Collectors Benefit From NFTs?

Art is expensive and often requires a lot of overhead—so it’s hard for collectors to get into the game. With NFTs, collectors can now have access to rare collectible pieces that are both affordable and easy to sell if they want to make money later.

NFTs are extremely secure and provide a high level of security for collectors who want peace of mind when trading items with other collectors around the world!

So, Nft collectors will find out about new artists from around the world. Some collectibles are made by artists who might not have been well known before.

In time these talented Nft artists are getting recognition from all over the world! and collectors get to enjoy all their favorite artists’ work without having to pay a premium price tag for it.

Overall, you may or may not see Nfts as an investment asset but the daily sales volume already reached more than $ 2 billion dollars. Yes, you heard it right with B!

Conclusion

As you can see, there is a lot to learn about NFTs and I believe they are essentially the future of blockchain-based gaming and digital collectibles.

In this post, we’ve covered a lot of ground. We’ve talked about what NFTs are, and how they differ from traditional digital assets. We’ve also talked about the difference between non fungible and fungible tokens, and how they work.

We hope you’ve enjoyed learning more about NFTs and the exciting new world of digital collectibles. We believe that NFTs will revolutionize the way collectors interact with their favorite brands.

If you’re interested in learning more about nfts, check out our Nft Guides to discover more Nft-related content, created by Nft enthusiasts for you. See you in the next article…

Share this post if you think it brings value to the nft community.

Ξ Furko Ξ

Ξ Furko Ξ

Founder of @NftGiant, Furko is a digital marketing professional and loves creating detailed content about Nfts, Metaverse and Blockchain.• Entreprenour • Designer • Collector

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