Benefits of Non-Fungible Tokens And Why They Are The Future Of The Blockchain

The explosion of blockchain and NFT news in recent years has left many of us wondering, "What exactly is happening in this world?" 

Crypto artwork has been existing for over a decade, but to many people outside the crypto industry, these digital assets, referred to as non-fungible tokens or NFTs, appear to have emerged out of nowhere. People are making millions of dollars selling something that the vast majority of us know nothing about. 

Even if you've read about NFTs in the news or read an article about them, I'm sure you're still wondering what they are and how they may help you make money.

Okay, so let's get started with the basics.

What is NFT?

NFT stands for Non Fungible Token.

Oh, you might be wondering what does Non Fungible means. So let me clear it. 

Non-fungible simply means it's unique and can't be replaced with anything else. A bitcoin, for example, is fungible, which means that you may swap one for another and obtain exactly the identical item. However, an artist's work is unique, and if you swap it with someone, you will receive something completely different.

How do NFTs work?

Many NFTs are part of the Ethereum blockchain at a very high level, but other blockchains can implement their own versions of NFTs, and there are a lot of them out there in the crypto world. Ethereum is a cryptocurrency similar to bitcoin, however NFTs operate in a slightly different way. As a result, this raises the question in our mind "How are NFTs different from cryptocurrencies?". 

When someone buys an NFT, they get ownership of a one-of-a-kind token that exists exclusively on the blockchain. If someone purchases an image or meme, they can own it on the blockchain, but they have no control over distribution rights.

In most situations, when you buy an NFT, you're not buying content, but rather a token that links your identity to the artist's art on the blockchain.

The digital tokens, on the other hand, follow the same deflationary principles as bitcoin. Although NFTs cannot be replicated, are readily validated, and are immutable, there is no way to predict whether their value will hold over time.

NFTs vs Cryptocurrencies

Fundamentally, bitcoin is a sort of fungible money with economic value. It makes no difference what crypto token you have within a certain cryptocurrency; it will always have the same value. For example, if you hold one bitcoin, it has the same worth as another bitcoin owned by a friend or anybody else in the entire globe. While having an NFT does not guarantee its worth, it may extend well beyond the economics.

What is the point of NFTs and Why do I care about it?

Normally, if you don't want to get involved in the crypto world, you may just go without knowing about it. However, the fact that you are here shows that you are interested in cryptocurrency and want to gain something from it.

So, to gain something from NFTs, let's deep dive into it.

If You Are A Buyer

One of the most apparent advantages of purchasing art is that it allows you to financially support artists you enjoy, and this is also true with NFTs. When you buy an NFT, you generally get some basic usage rights, such as the ability to publish the image online or make it your profile photo. There's also the bragging rights of owning the work, which is backed up by a blockchain entry. 

Yes. Probably. Ethereum is accepted by a large number of markets. However, theoretically, anyone may sell an NFT and ask for any currency they choose.

If You Are An Artist

There are markets, such as OpenSea, Rarible, and Nifty Gateway, that allow you to mine and sell your NFTs if you are a skilled graphic designer or want to sell anything as an NFT. You won't be able to sell your NFTs anywhere else than these platforms.

If your design appealed to a large number of people, you will be highly paid, and moreover you can earn a portion of amount every time your NFT is being sold to someone else. NFTs include a function that you can enable that pays you a percentage every time the NFT is sold or transferred, ensuring that if your work becomes really popular and its value skyrockets, you'll reap part of the benefits.

I Don't Want To Create NFTs

As a result, you could wonder if there is a method to make money without mining NFTs. You can, but you'll have to invest some money to make it work. You may purchase someone else's NFT and resell it for a profit. Make sure you're confident with the NFT you're buying because there might not be a market for it.

I've heard that NFTs are bad for environment. Is this true?

It's something to keep an eye out for. NFTs consume a lot of electricity since they employ the same blockchain technology as other energy-intensive cryptocurrencies. People are striving to address this problem, but most NFTs are still linked to cryptocurrencies that produce a lot of greenhouse gas emissions. After learning about the potential consequences of NFTs on climate change, a few artists have opted not to sell them or have cancelled future drops. 

What is the future of NFTs?

Nfts are becoming increasingly popular and since it has become a source of income for many individuals, I believe it will continue to be a trend for at least a few years. There are large communities around the NFTs which regularly try to increase its popularity.

However, you should be aware that NFT's value will continue to rise as long as there are individuals willing to trade or purchase it. And it's possible that, in the future, due to some unforeseen event, its value may drop to zero. As a result, before diving into the world of NFT, you must be aware of the dangers.

Thank you for sticking with me all the way to the end.

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