NFT: what is it?

But, for those who are not yet familiar with the concept, this article will be amazing to unveil all the details surrounding this new trend of assets that move millions of dollars every day.

It’s because NFT has become extraordinarily popular, as a real and concrete alternative to packing marketing, bringing the security features that crypto transactions offer.

So, how about knowing more about the subject?

What is NFT?

NFT is the acronym that defines “non-fungible token”, or non-fungible token. In order for us to start explaining to you exactly what it is and how important it is for the current market, it is essential that we conceptualize the two terms: token and fungible.

Starting off, let’s better understand what a token is. Essentially, a token is a digital representation of ownership of an asset. In this case, this asset can be anything that has value, from a bitcoin to a house or a work of art.

When you have a token for a certain item, it means you own it – or part of it, at least. Tokens are registered in blockchain technology to ensure their security and credibility.

Already fungible refers to what can be exchanged for a good of the same equivalent value. For example, a $100 bill can be exchanged for two $50 bills. Therefore, it is something fungible.

However, the Monalisa artwork is not a fungible item, considering that it is not possible to exchange it for anything that is the same.

Thus, when we think about the union of the two concepts, non-fungible token, we have the following idea: it is a representation of a unique item, which can be digital or not.

What is the NFT for?

Now that you know what NFT is, it’s easier to explain its functionality. Essentially, it serves to guarantee the authenticity of an item and declare that there is no other like it in the world, neither substitutable nor of equivalent value.

NFTs are becoming widely used in digital transactions, mainly involving artwork or unique models.

And, based on an old and very simple law of the market, anything that is unique usually costs more.

Thus, transactions involving NFTs often mobilize large amounts of money. Hence, this is one of the main reasons for relating them to blockchain technology.

What is the relationship between NFT and blockchain technology?

Blockchain technology is today synonymous with digital security. Data chaining generates a huge level of encryption, very difficult to be dropped, broken and, above all, alter.

After all, to modify what is inserted in the blockchain, it would be necessary to change the information in the entire blockchain, which is practically impossible to be done before someone notices the intention.

Thus, the inalterability feature is also advantageous to the NFT. That’s because it guarantees that nothing will be modified on the original item.

Also, the security issue involving financial exchanges and smart buy and sell contracts are benefited by the blockchain.

That’s why this technology has been highly efficient and used to broker the commerce of these assets on the internet.

Is it possible to create NFT?

Considering that an NFT is something original and exclusive, with a characteristic of not being replicable, it is perfectly possible to create one, as long as it meets these requirements.

Many artists, photographers, designers and even “memeiros” have created NFTs and made them available for sale online.

This has even made it an interesting way to market your works with the assurance that they will not be pirated.

Prefer to buy NFT? It’s also easy!

If you are not part of the group of creatives who can create an NFT, but are interested in acquiring them as a store of value, to wait for them to appreciate and then market them, in a common asset investment system, you can find good products on some digital platforms.

See which are the most accessed and which compile very interesting items:

• OpenSea
• Binance NFT
• variable
• solanart
• Foundation
• super rare
• Nifty Gateway
• 9Block (Brazilian)

What to look out for when dealing with NFTs

Considering that NFTs, in short, are digital assets that can be traded, they are, essentially, influential and influenced by the market.

And, like any item in this sense, they have details that can make them disadvantageous for a possible investment.

So, it pays to know what are the downsides of thinking about NFT trading as a way to make money.

Shitcoins

Shitcoins are the famous “fakes”. In this industry, there are many fake tokens, which promise to compile valuable information, but which are actually nothing more than bullshit.

Liquidity

NFT liquidity is not as fast as you might think. Despite being interesting and unique items, you can’t always pass them on in a timely manner. So, consider a long-term investment.

Volatility

NFTs are relatively new digital assets. Therefore, they are still going through a price consolidation process, which makes them highly volatile in the market.

cheats

Many scammers can appropriate other people’s items, turn them into NFT and sell them as their own. Essentially, this is fraud, and if you buy one of these assets, you are indirectly committing a crime. Therefore, it is worth keeping an eye on and demanding guarantees of intellectual property.

Advantages of Dealing with NFTs

If we talk about the negative points of thinking of NFT as a source of investment, it is also interesting to explain the advantages of making this type of transaction.

After all, it is undeniable that they are being traded and it is worth understanding a little more of the reasons why these transactions are so successful.

Is easy

Blockchain technology allows transactions involving NFTs to be very simple to be carried out, in addition to being safe and fast.

They value themselves a lot

Despite having not so interesting liquidity, the valuation of an NFT is real. If you are lucky enough to bet on an advantageous asset, you can profit extraordinarily from its sale later.

Watch out for NFTs!

If you are thinking of investing in digital assets, but still can’t bet on cryptocurrencies, NFTs are a good alternative.

In fact, not only as a store of value and investment funds but also as a real alternative for making money, creating them and making them available for sale.