What Is An NFT?

If you have been following the latest trends in the digital world, you definitely came across the term NFT. The acronym is quite popular among the new generations of digitalization and people are investing in NFT as much as they could. If you haven’t seen already, NFTs are everywhere, from art to music to video games to personal profiles, you can find NFTs in all areas. 

But what is an NFT? Here we have gathered all of the information you need to know about NFTs and how they work, so let’s take a look. 

What Is An NFT?

An NFT or you could understand it as a Non-Fungible Token is a digital asset composed of real-world objects such as art, music, profiles, video games, etc. Just like cryptocurrency, the NFTs are dealt with in the online world for millions of dollars. 

In technical terms, they are the digital sets of data that are stored in blockchains. These blockchains have the name of the owner which is then transferred when the NFT is sold to someone else. All NFTs have different and unique identification codes to keep them separated from each other and identify the course of each NFT. 

How Does NFT Work? 

As we have mentioned already, NFT works by storing data sets in the blockchain format which are then sold and transferred to new owners. Usually, the Ethereum blockchains are used to hold the NFTs, but they can work with pretty much all formats. 

To make it simpler, consider any tangible or intangible object you can think of that could hold value in digital form. It could be any collectible such as your designer sneakers, your exclusive video game characters, or your special GIFs. You can pretty much turn anything into an NFT and sell it for millions of dollars.

Examples of NFT

There are numerous real-world examples of NFTs and people making money off of it that can help you understand the process of an NFT better. A good example is when Twitter co-founder, Jack Dorsey, made $2.9 Million for creating an NFT out of his first tweet and selling it. 

Another example would be when actor William Shatner made a series of NFTs of his memorabilia which contained nothing but the pictures of himself throughout his 60 years of his career. The NFT was so successful that he sold up to 125k units of it within the first 9 minutes and earned millions of dollars. 

Another example of noncelebrities is 22-year-old Indonesian man named Ghazali, who created an NFT of his selfies. Ghazali took selfies every day from 2017 to 2021 with the same exact expression every single day. He turned them into an NFT and sold them online for millions of dollars. 

So, now you know, anything could be sold through NFTs as long as it is unique and you know the worth of it! 

What Is NFT Used For? 

NFTs is a term used for digital assets. If you want to develop an understanding of what it is used for, keep on reading. Back when NFTs first developed, there was a prediction that there would be a time when people could claim things that are validated via digital assets. NFTs would be, and are now used to buy and sell almost all tangible and intangible items and claim ownership over them. 

For example, valuable art crafts, collectibles, antique pieces, and even property and land, all of it can be transferred into NFTs and be sold. The purpose is to bring the world to digital platforms. 

Why is NFT Becoming Popular? 

Until 2021, most people had no idea what an NFT was and how it worked. Come the end of 2021, all of a sudden, everybody knew what an NFT was. If you don’t know, then you’ve definitely heard of it. Not just IT tech experts but high profile celebrities such as Paris Hilton and Jimmy Fallon are using NFTs and conversing about them regularly. 

So, what is it that is making NFTs so popular? According to data analysts and researchers, the rise in popularity of NFT is the result of the rise of cryptocurrency and the adaptation to technological advancement. The interest of people investing in digital currency and earning money out of these investments made NFT a popular area of earning for them. 

Moreover, it is an easy and productive way of monetizing your assets. This concept has helped many creative industry people and young artists to showcase their talents and make them worthy. 

Also, many economists and digital experts have suggested that the NFTs are here for a long-run plan of action. They seem to be getting popular with each passing day and if the success rate stay this high, there’s a pretty good chance that it could turn into the largest earning digital concept. 

Popular NFT Marketplaces 

If you want to get yourself into the NFT business, you need to jump into the pool of NFT marketplaces. These marketplaces are online platforms where thousands of NFTs are bought and sold. There are quite a few NFT marketplaces running on the internet but let’s talk about the leading marketplaces in the digital world; 

OpenSea is the largest NFT marketplace you can find. It has the highest number of sales volume in NFT and purchases and is the most popular NFT platform globally. The best part about this, is that it is extremely easy to use for both the seller and the purchaser. The Opensea Marketplace supports Ethereum, Polygon (Matic), Solona and Kalytn Chains. Opensea supports over 150 cryptocurrencies payment methods such as Metamask. In terms of commision, Opensea charges 2.50% per transaction fee to seller when the NFT item sells with no cost to the buyer.

Axie Infinity is a Play-to-Earn game focused on trading and battling with creatures known as “Axies” (characters based on axolotl), which are digitized as NFTs. It was developed by Vietnamese studio Sky Mavis as a player-owned economy game using the Ethereum-base cryptocurrency. The game was released on March 2018, with huge growing success. Currently, it is a $3Billion valuation with some players have made a living from breeding and selling the digital creatures. The most expensive Axie ever sold $820,000. As of September 2021, the majority of players were based in the Philippines. Supported in Android, iOS, Windows, Mac OS platforms.

NFT Top Shot is an NFT Markeplace based on FLOW chain developed by DapperLabs, the creators of CryptoKitties. NBA Top Shot has NFTs collectibles of famous NBA games and players and is popular in the basketball industry. Each NFT listed on NBA Top Shot is sold in millions proving that fans are crazy for all things NBA while still being involved in the digital world.. 

NFTs are continuing to expand and are only growing more in the upcoming years. Hope you got all the information you need about NFTs and if you have any queries, let us know! 

Summary
What Is An NFT? How Does NFT Work? 
Article Name
What Is An NFT? How Does NFT Work? 
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If you have been following the latest trends in the digital world, you definitely came across the term NFT.
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LUCKMON
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