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What is NFT and How to Buy It: Explained

Published Thu, Jun 23 2022 02:07 am
by The Silicon Trend







What is NFT and How to Buy It: Explained

Non-fungible tokens (NFTs) seem to have expanded out of the Ether in 2022. These digital assets sell 17th-century Dutch tulips for millions of dollars, from art and music to toilet paper and tacos.

However, are NFTs worth the hype? Some experts believe they're a bubble poised to pop, such as Beanie Babies or the dot-com craze, while others say NFTs are here to stay and will transform investing forever.


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What Do You Mean by NFT?

An NFT is a digital asset representing art, music, in-game items, and videos. They are bought and sold digitally, often with cryptos, and are generally encoded with the same underlying platform as many cryptos.

Though they've been around since 2014, NFTs are gaining popularity and attention these days as they can buy and sell digital artwork. A staggering $174Mn has been spent on the token since November 2017.

However, several NFTs, at least these days, have been digital creations that already exist in some form, such as iconic video clips from NBA games or securitized versions of digital art that are already buoyant on Instagram.

For example, famous digital artist Mike Winkelmann crafted a composite of 5K daily drawings to develop the most renowned NFT of the moment, "EVERYDAYS; The First 5000 Days." which sold at Christie's for a $69.3Mn.

Not only does NFT let the buyer own the original piece/item, but it also contains integrated authentication, which serves as ownership proof. So naturally, collectors value those bragging rights almost more than the piece itself.


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How is NFTs Different from Cryptos?

NFTs are generally developed using the same type of programming as cryptos such as Ethereum or Bitcoin; however, their similarities end here.

Cryptos and physical money are fungible, meaning they can be exchanged for one another. They are also equal in value, i.e., one dollar is always worth the other; one Bitcoin is equal to another Bitcoin. Crypto's fungibility makes it a trusted means of performing transactions on the blockchain.

NFTs are different. Each has an e-signature that makes it impossible for tokens to be exchanged for or equal to one another. For instance, one NBA Top Shot clip isn't equal to EVERYDAYS simply because both are NFTs.


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How Can You Buy NFTs?

If you're interested in starting your NFT collection, you'll require to achieve some essential items. Firstly, you'll need to attain a digital wallet where you can store NFTs and cryptos. 

You'll likely require to buy some crypto, such as Ether, depending on what currencies your NFT provider accepts. You can buy crypto leveraging a credit card on platforms such as PayPal, Coinbase, eToro, Kraken, and Robinhood. You will then be able to move it from the exchange to your convenient wallet.

You will want to keep prices in mind as you research choices. Most exchanges charge a minimum percent of your transaction when you purchase crypto.


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