What are NFTs? A Guide to Understand Non – Fungible Tokens

June 10, 2021

What are NFTs? A Guide to Understand Non – Fungible Tokens

The NFTs buzzing aloud all over the cryptosphere often leads to certain dilemmas. What remains the grist for the gossip mill is the question – Are NFTs worth the money or simply the hype?

Though NFTs have been around since 2014, they gained noticeable existence in the year 2021. Yes, 2021 has made NFTs more happening and notorious.

What are NFTs?

NFTs are basically digital assets that are termed as Non-Fungible Tokens. The term “fungible” refers to the property of the digital assets to be exchanged without any compromise with its value.  Largely, it comes into the role of representing photos, videos, audio, and other such digital files.

Alongside, the digital assets provide exclusive ownership rights. There happen to be a lot more features that make this buzzing cryptocurrency outshine. Most of all the use cases of NFTs are making it the countable and reliable cryptocurrency.

How are NFTs unique?

Alike other cryptocurrencies NFTs are based on blockchain, majorly the Ethereum blockchain. They are minted as digital objects for both tangible and non-tangible items which include Art, Videos, GIFs, Designer Speakers, Music, Collectibles, Virtual avatars, video games, etc. As a result, attract the attention of the masse around the globe.

Each NFT is awarded a distinct digital hash that serves as evidence of provenance. Though NFT developers can issue any amount of tokens, their supply is limited to boost the rarity.

They are considered digital collectibles owing to their authenticity and ownership of artworks, creations, etc.  The permanent information tab marks its uniqueness. These are completely indivisible; therefore only allow the purchase of the whole amount or nothing at all.

They are non-transferable and are traded only through specific exchanged marketplaces. In this case, the user’s data and application cannot be modified once it has been committed.

Major trends in NFTs

Undoubtedly, these are bestowed with various unique characteristics and as a result, their dominance in the crypto environment has increased over the year. Guess what?

There exist several factors that have driven this non-fungible digital asset towards the brighter limelight. NFT Art, Crypto kitties, NFT Collectibles in the music industry, etc. are few prominent factors amongst these.

Today, the artists are trading immensely through its marketplaces. It has emerged as the perceiving financial collectibles and not just a hobby. Richard Chen, the founder of Crypto Art has attributed the growth of NFTs with its authenticity feature.

Crypto kitties, which is a renowned game found on the Ethereum platform allows buying, collecting, selling, breeding virtual cats. It was initially used for recreational purposes but in no time it turned into a huge crypto boost.

The enthusiasts can need to have Firefox or chrome along with Meta Mask wallets and ETH coils to purchase Crypto kitties. This game is a huge platform where it comes into an active role.

The music world is also seen invading the NFTs zone. Canadian DJ Dreadmau5 partnered with Worldwide Asset Exchange (WAX) to issue a blockchain drop. It is expected that Deadmau5 would operate like virtual stickers to collect and facilitate trade further.

In the days to come Organizers and sponsors might bring this rare digital asset to the use of people willing to attend concerts.

Conclusion

The NFTs are growing significantly and their use cases too.  As the digital assets for digital objects NFTs have become the talk of the town.

There exist a long way for the NFTs to move ahead if their authenticity is maintained and challenges are timely adhered with. The several market places of the NFTs hold major impactful features which certainly make the NFTs ride smoother.

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