Cryptocurrencies are not giving up their leading positions. Every day there are more and more assets to pay attention to and consider adding to your portfolio. However, one particular asset has flooded social media and financial outlets: NFT.
NFT (Non-fungible tokens) is a unique digital asset that belongs exclusively to you. When it comes to cryptocurrencies, you can easily replace one unit with another and not notice the difference. For instance, if you have 1 BTC, you can exchange it with your friend for 1 BTC of theirs. Did anything change for your portfolio? Not really.
But when it comes to NFTs, you get something one of a kind. If you make a simple analogy, it is a rare collector’s card that has no doubles.
What can become an NFT?
Pretty much anything qualifies for this: domain names, music, digital paintings, even tweets.
How does it work?
Each NFT has its own token address that you can receive in a transaction within the Etherium blockchain.
Are NFTs truly unique?
The answer to that question is the part of the discussion that surrounds the topic. Yes and no. At the moment, the famous Mona Lisa, signed by Leonardo da Vinci, belongs to the Louvre museum. Owning an NFT is like owning that exact painting. Can it be copied and distributed? Yes. But you own the original piece.
What is the purpose of owning an NFT?
According to market analytics, NFTs can become the equivalent of branded luxury items. Considering the impressive amount of time we spend online compared to just a few years ago, this can become a new way to show your status and have something brand new in your possession.
Do you have the intellectual property of your NFT?
If we come back to the Mona Lisa comparison, the answer becomes obvious. The intellectual property still belongs to the author (the original creator of the NFT), but you own the work itself.
Where can you buy NFTs?
If you decided to become an NFT owner, here are some sources that would be useful for you:
- OpenSea.io - this platform allows you to discover new creators, sort them by popularity, discover new names, and find interesting items for your future or existing collection. All you need to have access to the catalogue is to create an account.
- Rarible - another open marketplace for NFTs with some exclusive features like RARI tokens.
- Foundation - this website requires an invitation from other creators to be able to sell your works. So for you, as a buyer, this will mean a higher quality of NFTs to choose from, including content from worldwide popular creators.
Just within 2020, 74,529 wallets bought at least one NFT, and the total volume of NFTs traded in the US alone makes $250.85 million.
Like any other asset, NFTs have great potential and can become a great source of profit later on. However, there are obvious downsides to it. These assets are unpredictable in terms of long-term investments since this market is relatively new. So, buying an NFT is a personal decision you need to make based on extensive research.
