We have heard a lot about NFTs for the past couple of years. Searches for NFTs reached record highs in 2021 and then plummeted in 2022. However, celebrity NFTs have seen some increase in searches lately with the news of the launching of Christiano Ronaldo’s NFT.
Recent news about YouTube creator iShowspeed also starts from his relationship with a pay-to-earn NFT game. So what is NFT exactly? What does it mean, and why do we have to care first? 4i Magazine has got it covered for you.
NFT stands for non-fungible token. What we mean by “non-fungible” is that the token holds an “irreplaceable” value.
For example, a dollar is fungible because the value of that sheet of paper is the same as another dollar, and it wouldn’t be a problem to exchange it for another dollar.
But if a celebrity signs that dollar bill, for example, it becomes not interchangeable with other dollar bills because it might have more value than normal bills.
These tokens are registered on a blockchain system, and most are on Ethereum. As blockchain systems record trading actions on the system, you can trace back a specific token’s initial uploader through its history of interactions.
So how are NFTs used?
A large part of the market is from artists and their buyers. They are not trading physical artworks or the files of artworks themselves, but their ownership is registered as NFTs.
You might then wonder about the virtue of buying ownership when anyone can easily copy and paste artworks these days… Well, you’re right, but you’ll know that you’re the true art owner as long as you hold on to that work’s NFT!
Artists can sell the ownership of their works as NFT for some extra cash. As for the buyers, or those who enjoy collecting artworks, they can resell the works if the value of NFTs they own goes up higher than the purchase price.
Their prices can go up high depending on the reputations of the original creators, too. For example, YouTube creator Logan Paul bought an NFT from the Azuki collection for 623,000 dollars. Sadly, the token’s value has dropped to 10 dollars, according to reports.
NFT does not only have to be about art, either. Earlier this year, Nike released virtual sneakers as NFTs, with prices ranging up to 134,000 dollars. Adidas also sold NFTs and gave buyers access to limited-edition, real-world clothing.
These NFTs are bought and sold at trading markets online, like Open Sea.
So do we have to use real money to buy NFTs? Yes and no. The currency you will use depends on the blockchain system the NFT holder prefers, but the most widely used digital currency in trading NFTs is Ethereum. First, to buy an NFT, you will need enough money to fill up your Ethereum wallet.
Long story short, NFT is a digital token that holds its unique value and is often used for trading ownership of artworks.
Is buying an NFT worth it? Well, it depends on what you think! Do you fancy becoming the one and only owner of an item or artwork you love so much? Then yes!