What exactly is an NFT?
NFTs refer to non-fungible tokens. “Non-fungible” means that it is unique and cannot be replaced by something else. An NFT represents a unique digital version of a multitude of products. Each NFT is completely different from any other, it gives its owner the certified version of that asset and can fall in any category such as art, music, fashion, sports, gaming and more.
How do NFTs work?
You’ve probably heard of CryptoKitties, the first NFT game or the Bored Ape Yacht Club, one of the most popular NFT collection.
NFTs are created and stored on a blockchain platform, such as Ethereum. They can be transferred between users just like any other cryptocurrency and can also be used to store value. NFTs reflect the certificate of ownership and authenticity of an asset.
Each NFT has a distinct ID linked to a single address, in most case an Ethereum address which allows its owner to be very easily identified.
When a transaction occurs on Ethereum, the seller must pay what is called a gas fee to the miners for providing their service. These fees can sometimes be very high when the demand to make transactions is high.
Why are NFTs so popular?
NFTs have seen a growing interest because people see them as assets to collect and trade but also as an investment. NFTs offer a new way to create and share digital content and assets. They’re also secure and transparent thanks to the blockchain technology they’re built on.
NFTs have really exploded in 2021 due to celebrities showing interest in this new project but also major brands like Nike, Square Enix and Disney have created their own NFTs.
Where to buy NFTs?
NFTs are available on what is known as auction platforms similar to a marketplace. These platforms offer different kinds of NFTs, depending on what you want to buy. The most famous NFT platform being OpenSea.