General about NFTs
NFT is an abbreviation of “Non-Fungible Token”, which would mean an irreplaceable token in Croatian. NFT is a unique digital file that is usually stored on a blockchain. Unlike “Fungible Token” – “fungible things”, such as other cryptocurrencies or coins or banknotes, which are interchangeable, NFTs are unique. Each NFT has its own unique digital identity that sets it apart from others. This means that each NFT can represent digital artwork, music, videos, virtual objects or any other type of digital asset, while not sharing any of these properties with other NFTs. On the other hand, each bitcoin is completely identical to another bitcoin, i.e. the person who accepts it as a means of payment will not pay attention to whether your bitcoin has been mined e.g. in the third or fifty-third block, given that the two bitcoins are completely identical. Despite the huge growth in popularity of NFTs in the last bull market, in the last year they have been drastically affected by the fall in cryptocurrency prices. It is a risky, but also promising market that is still looking for the right values that it wants to represent, that is, cover for its existence. Numerous scams have been associated with NFTs, as well as legitimate projects, and the future of NFTs is not certain, but it will certainly be interesting to observe how the market of the same will develop further.
Source: cointelegraph
Why NFTs on blockchain?
Blockchain technology, which is behind NFTs, enables transparency and security. If the data were not stored on a decentralized and distributed network, but on a centralized server, there would be the possibility of hacking or duplicating or stealing NFTs, and they would lose value. NFT ownership information is stored on the blockchain, which means it cannot be faked or altered. This gives trust to customers and creators that their assets have real value and authenticity.
Source: cointelegraph
Application of NFTs in the real world
NFTs have several promising real-world applications that have attracted the attention of large institutional investors. Here are some potential applications:
1. Real asset tokenization: NFTs have the potential to tokenize real assets like real estate, luxury items, stocks or any other form of physical ownership. Tokenization of these funds allows easy transfer of ownership, but also fractional ownership, e.g. the tokenization of the apartment would allow the possession of 1/10 of that apartment for one person. NFTs in this way provide liquidity and accessibility to traditionally illiquid funds, given that e.g. luxury apartments or works of art have become affordable to invest in average people who do not have the money to buy an entire apartment or an entire work of art.
2. Digital Art and Collectibles: NFTs have revolutionized the art industry by providing a way to authenticate and track ownership of digital artworks. Artists can turn their works into NFTs, allowing collectors to buy and own unique digital creations. In this way, NFTs allow artists to make direct money on their work without intermediaries, and collectors can prove authenticity and ownership of their digital collections.
3. Video games: NFTs have found significant application in the world of video games. Players can buy and trade unique items, characters, virtual real estate and other forms of virtual assets as NFTs. This provides players with real ownership and the ability to transfer their resources between different games or platforms. NfTs also allow developers to create the value of digital objects, giving video games an additional impression of reality.
These are just a few of the potential applications of NFTs, although there are many other areas that could leverage NFTs to improve their business.
Source: cointelegraph
How to buy NFT?
Most NFTs can only be purchased with Ether (ETH), or the native currency of a particular network e.g. (AVAX) on Avalanche, therefore owning some amount of that cryptocurrency and storing it in your own wallet (most often Metamask) will be the first step. You can buy NFTs through any of the online NFTmarkets, including OpenSea, Rarible, SuperRare, Blur… First of course you need to check that this is a legitimate NFt store, not a fake store that will steal your keys, that is, money. Simply perform this check by making sure that the URL of the page matches the one listed in the store’s social networks. For example OpenSea has a link on its Twitter profile that leads to their official website opensea.io. After making sure that everything is correct, you simply connect your wallet to the site and choose the NFT you want to buy, pay the transaction fee and the price of NFT, and after that you successfully purchased your NFT, and the proof of owning it is stored on the blockchain.
Source: cointelegraph
Conclusion
The idea of digital assets has existed for a long time, but it is THE NFTs that have enabled the realization of this idea into practice by applying smart contracts and blockchains. This emerging technology is as volatile as the entire cryptocurrency market, but at the same time it is applicable in a number of areas from the traditional world. We’ll see if that application comes to fruition, or if it’s an overexcitation around technology that has gained popularity due to the story of rapid profits. We hope you enjoyed reading today’s blog, we would love to find out your opinion on NFTs, whether this is a common scam or there are actually areas where this new technology is applicable. You can answer us on our social networks (Instagram, Twitter).
