What Is an NFT (Non-fungible Token)? The Ultimate Guide
Last year, the media had an endless supply of headlines about non-fungible tokens, or NFTs. With this avalanche of news, you may have wondered: What is an NFT?
Non-fungible tokens, or simply NFTs, seem to be everywhere! These digital assets helped some artists and investors add many zeros to their bank accounts.
Also, the market saw pictures of apes sold for tens of millions of dollars as NFTs.
The truth is that they have transformed everything in their path, from finance to art and food. However, they are still a source of confusion.
Do you want to solve all your NFT doubts? Here's a complete guide with everything you should know about non-fungible tokens.
What Is an NFT? Non-fungible Tokens Explained
As mentioned, an NFT is a non-fungible token. The term describes a unique data unit on a blockchain that provides immutable ownership proof.
NTFs can be linked to digital objects such as images, avatars, video games, and songs. They can also be connected to physical assets such as houses, buildings, cars, and yachts.
Any work that can be represented in a digital form can be a non-fungible token. NFTs are generally used to give access to exclusive products or as tickets to live and digital events.
Non-fungible tokens are often compared to traditional digital currencies like Bitcoin and Ethereum. Like cryptocurrencies, NFTs operate on a blockchain network. That technology enables NFTs to be transferred from one wallet to another quickly and securely.
However, cryptocurrencies and non-fungible tokens are different. Each NFT has a unique transaction hash. These alphanumeric codes are unrepeatable identifiers and prove that the block's information has not been modified. In other words, you cannot find two identical NFTs.
With non-fungible tokens, people can create, sell, and buy physical or digital objects in a verifiable way. However, a person purchasing an NFT artwork is not acquiring its copyright or intellectual property unless otherwise stated.
If you purchase an NFT, you are not acquiring its copyrights and commercial rights. You're buying the metadata associated with the token, not the token itself.
What Does NFT Stand For?
The acronym NFT stands for non-fungible token. These digital resources are ideal for representing real-world value. However, unlike cryptocurrencies and fiat money, no NFTs are related to another asset in circulation.
In other words, non-fungible tokens are unique and irreplaceable. Therefore, they can lose or gain value when exchanged for another. As with unique artworks, you cannot buy an NFT with a cryptocurrency and expect it to hold the same value.
If you have a dollar and try to swap it for another dollar, it will have the same value. Digital currencies like Bitcoin or Ethereum can also be exchanged with each other. However, no two NFTs are the same. Non-fungible tokens have unique digital signatures that make them non-exchangeable.
You can't replace an NFT with an identical version of itself because it doesn't exist. An art piece turned into a token is not necessarily equal to another NFT art piece. Even if they are from the same author, they are cryptographically different.
Now that you know what NFT stands for and the differences between fungible and non-fungible tokens, let's see how everything works.
How Do NFTs Work?
All non-fungible tokens exist on a blockchain that records related transactions. If you're familiar with cryptocurrencies, you've likely heard about this technology.
Most NFTs are held on the Ethereum blockchain. Many creators prefer to host NFTs on this platform as it offers many advantages, such as support for ERC-721 tokens.
Each ERC-721 token is unique. NFT owners seek that quality to leverage the effect that a product’s limited editions create.
However, other blockchains also support non-fungible tokens, such as Binance Smart Chain (BSC). Some have even implemented their own version of NFTs.
NFTs are also compared to physical collectibles. They are minted from objects that can represent tangible items, such as a hanging oil painting and designer slippers. However, you get a digital file instead of the actual item.
Fungible tokens sometimes represent intangible items such as graphic art, music, virtual avatars, and video game skins. Even sports highlights and tweets can be turned into NFTs.
Twitter's former CEO and co-founder Jack Dorsey, for instance, sold his first tweet as an NFT for nearly $3 million.
By purchasing an NFT, you gain exclusive ownership rights. However, NTFs can only have one owner at a time. Therefore, you can transfer your non-fungible token to another person, but only one person will own it.
Blockchain technology makes it easy to verify ownership and track the transfer of tokens between users. This attractive feature also allows creators to program royalties to earn a percentage of sales every time the NFT is sold to a new owner.
Also, you should bear in mind that owning the NFT does not mean you're granted the copyrights. Their creators can store specific information in the token's metadata, including their signature.
What Are NFTs Used For?
From content creators to real estate agents, everyone can benefit from NFTs and blockchain technology.
Although art and collectibles have gained popularity among NFT creators, they're not the only way to make money. A 2011 GIF of a cat with a pop-tart body, known as Nyan Cat, sold for more than half a million dollars. Moreover, world-renowned fast-food chains like Taco Bell have sold NFTs to raise funds for charity.
The real estate industry has also embraced non-fungible tokens. NFTs can tokenize real-world tangible goods such as houses and buildings. This process allows owners to sell and buy their assets more quickly and efficiently.
Tokenization also reduces the chance of fraud, making trading real-world and digital items more secure.
NFTs can also function as tools to represent people's identities and property rights. Some tokens are used to give exclusive access to events, such as concerts and conferences. Singers and bands have started selling NFTs as tickets with benefits for fans.
How to Buy and Sell NFTs
There are many markets in the crypto space where you can buy and sell NFTs. They all work differently but provide the same functionality and offer similar types of non-fungible tokens.
Most platforms work with the Ethereum blockchain protocol. However, you can find some that belong to alternative networks, such as Binance Smart Chain, Cosmos, and Polkadot.
Buying and selling NFTs is not rocket science, but you need crypto knowledge and an e-wallet. MetaMask and Coinbase Wallet are the two most common crypto wallet options.
Once you choose the marketplace to buy non-fungible items, you must visit its home page and connect your electronic wallet. Most platforms have spaces where other users post their NFTs. Visit those profiles and review the collected options.
Some listings allow buyers to make an offer to owners, but others only have a "buy now" option. If you want to submit a quote, choose the amount you are willing to pay and wait until the trade is complete.
The NFT is then transferred to your wallet. All marketplaces require a percentage for each market transaction.
If you want to sell an NFT, you need to follow the first steps until your wallet is connected to the platform. Then, go to your profile or trading section, select the token, and hit the "sell" button.
You can choose a fixed price or select the timed auction option so users can bid on your NFT. As a seller, you also need to pay the gas fee.
Top Marketplaces to Buy and Sell NFTs
There are dozens of NFT marketplaces available if you want to buy and sell NFTs. However, each one focuses on a specific niche or industry. Therefore, you should do quick research to decide which one to use according to your preferences.
If you are new to the NFT world, you can try some of these:
It's the world's leading NFT sales platform. You can get all kinds of digital assets on OpenSea. Also, it has some tools to create your own token.
OpenSea is free and allows users to explore hundreds of crypto/NFT offers. Are you ready to buy your collectible? It has over 150 different payment options. As you can see, it's a good place to start buying and selling non-fungible tokens.
It's another of the largest NFT marketplaces out there. Like OpenSea, it hosts all sorts of non-fungible tokens. Whether you're looking for videos, music, or collectibles, this platform has you covered.
Rarible is based on the Ethereum blockchain. However, you will need the platform's own token, Rarible, to buy and sell there.
Even though it was launched just last year, Foundation has managed to sell over $100 million worth of NFTs. It's the ideal marketplace for those who want to bid on digital art.
Artists can join the Foundation community to create and sell their non-fungible tokens. If you want to buy an NFT here, you only need a crypto wallet funded with Ethereum.
How to Display Your NFT
After acquiring your NFT, what do you want to do with it? In addition to enjoying all the benefits that non-fungible tokens provide, you can take pride and show off your new collectible.
An art piece is easy to display. You only have to frame it and place it on your wall or desk. However, you may have trouble showcasing your NFT songs, videos, or avatars.
If you're looking for a way to display your NFTs, you have two options: print them or use digital frames.
Are you looking for an original way to display your non-fungible token? Digital frames are the best alternative for you!
Platforms like Rove enable users to create a metaverse and display their NFT using a digital frame. Most online displays can be controlled by smartphones and offer multiple features, such as auto-rotate functions and QR codes.
Also, there are some alternatives if you want to get your NFT physical. If you have been looking for an inexpensive way to display your non-fungible, still image tokens, you can just print them. Some people generate and frame a QR code that they hang on their walls to give easy access to the artwork.
However, if you want to show off your NFT on your wall or modern home office in high quality, you should use the Autonomous OG NFT Frame.
With Autonomous OG, you can showcase your NFTs and create a physical collection in crisp, vivid colors.
Get your one-of-a-kind, non-fungible tokens from your wallet to the wall with this wonderful device! It has several tools to help you customize your collectible, including an accelerometer.
With this feature, the device changes the NFT display from landscape to portrait according to its orientation. Therefore, you can use Autonomous OG to create your own tokenized museum with all your precious works of art in 4K resolution! It offers 2 OG frames with different sizes for your choice. The first one comes with a display ratio of 16:9 with the display size at 32". It is named OG Spectrum. The other is called OG Flex with the display ratio of 1:1 at the size of 19".
NFT display for digital frame art is the NFT display frame for your home. With this NFT frame display comes a great NFT digital frame for your NFTs.
Autonomous OG frames your unique digital assets and lets them shine. You only need to download the MetaMask app, open your account and connect it to the Autonomous app. This option also guarantees that you own the NFTs.
After that, you are just a few steps away from uploading your NFTs to the album and displaying them on the frame!
The Autonomous app also offers some benefits. If you use this tool, you can change the transition speed on your digital display device. Choose between its standard transition speeds, or customize one to show off your NFT as you want.
Square NFT display for digital frame art is the NFT display frame you need. With this NFT frame display comes a great NFT digital frame for your NFTs.
Are you proud of your NFT ownership and want to show everyone what you have gotten? Use Autonomous OG and hang your collectible on the wall. You can also bring it to your workspace and add some office accessories for men or women for a more original and personal touch.
Now, you can answer the question of “What is an NFT?” yourself. Your precious NFT doesn't have to remain hidden in your wallet. After learning what you need to know about non-fungible tokens and getting yours, just show it off!
Besides promising many advantages, non-fungible tokens are also collectible. You can choose from hundreds of options ranging from pictures to high-quality videos. If you got one, you should try Autonomous OG and let the world appreciate your NFT as much as you do.
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