What is an NFT and how to look at it?
Most of the time people don’t even know what an NFT is while there are artists selling their artworks for millions of dollars.
Artist called Pak sold his artwork called ‘The Merge’ on December 2, 2021, for unbelievable $91,8 millions.
NFT stands for NON-FUNGIBLE-TOKEN. Each token has its own unique ID and represents ownership of some digital asset, some JPEG, video, music or anything else.
Non-Fungible vs Fungible
When something is fungible that means it can be easily replaced with an identical object.
For example: $1 bill can be replaced by another $1 bill. Its value is still the same even when it’s a different bill. This factor makes it a fungible object.
Non-fungible object means that it cannot be replaced with another object.
Let’s say Michael Jordan would like to sell shoes that he played a match in. They will have 100x bigger value than yours even when it is the same model of shoes.
NFTs use the same concept, it’s a digital asset that represents a unique object, digital art, music, video, and much more.
Why should people consider researching NFTs?
With NFTs, you can easily prove your ownership of any digital object stored on the blockchain.
NFTs are limited in number, so their value varies depending on demand and interest.
There are multiple categories of NFTs: Collectibles, utilities, art, music, etc.
Each of these categories has something to offer and has different ways of how they build their value.
What makes NFT valuable?
There are countless reasons to buy an NFT but let’s take a look at a few of them.
1. Uniqueness — Each NFT is a unique product, there is no possible way to create another NFT with the same ID on the same smart contract.
2. Collectible — Many people collect NFTs and create their own collectibles collections. And because most of the time there is a very limited number of products from the same artist or from a collection it comes with its value.
3. Immutable — None can ever delete Tokens metadata from the blockchain. It can’t be edited, deleted, faked, or counterfeited.
4. Utilities — Some NFTs are not collected mainly for their design or anything like that. They can come with a utility for owners. (membership in a club, passive income, Premium events, etc.)
