Why are people attracted to NFTs?
An NFT is a non-fungible token. But what does this mean, and why are people in the cryptocurrency market attracted to them?
Put simply, non-fungible means that something is unique and therefore cannot be replaced with something else.
As an example, a Bitcoin is fungible. This means you can trade one Bitcoin for another and you will have the same thing. Much like fiat currency – swap one $1 note with another and you will still have $1. However, an oil painting is fungible. You can swap it for another painting, but you won’t have the same thing.
In cryptocurrency, most NFTs are part of the Ethereum blockchain, however other blockchains have also created their own version of non-fungible tokens. Ethereum is a cryptocurrency, similar to Bitcoin or Dgecoin, but its blockchain records who is holding and trading NFTs.
NFTs can be anything digital – for example, drawings, music, your brain downloaded and turned into an AI. However, right now much of the excitement around NFTs centres on using the technology to sell digital art. One currently famous example is the founder of Twitter selling his first tweet for $3 million. (Sadly for the buyer, this has since drastically decreased in value!)
Much like traditional artwork, people can copy the artwork of NFTs (much like you can make or buy prints of Renoir paintings). But NFTs give you something unique that cannot be copied, and that is ownership of the work. Again, very much like only one person can own the original artwork that is copied. In some ways it can be seen as being like owning the rights to music.
Many people see NFTs as the future of collecting. For more information about NFTs, you can visit this official site related to NFT trading.
Why do people choose NFTS?
Wondering why people choose to invest in non-fungible tokens? Here are some reasons why.
The most common advantage of NFTs is similar to all cryptocurrency and that is the lack of need for a middle man or brokers. Cryptocurrency platforms do not allow any mediators to interact with the artist interested in selling their artwork, for example, unlike traditional selling. This can reduce expenses considerably.
It’s open for everyone
If you are looking for a way to charge for your services or artwork, you could use a traditional bank. But not everyone is accepted for a bank account. And you may not be able to trade with some countries or territories. NFTs, on the other hand, are available to everyone.
NFTs offer more security
With a non-fungible token, the idea is that every digital asset is secured, giving you greater peace of mind. To make it even more secure, you can seek proper support with blockchain technology. (Blockchains are a way of storing data without needing to trust any particular company or entity to keep the data secure and correct.)
Blockchain technology stores a record of the data and the person connected to it. The funds cannot be stolen from the blockchain as security is connected to Cryptography, the insurance of collectables and records.
Could NFTs be right for you?
If you are a creator or an investor in digital products and artwork, we hope this article has given you an insight into NFTs so you can do more research to work out if they may be right for you.