If you have clicked on this article, you probably already know many things about the crypto and trading world. Or you could be brand new to it. Anyway, welcome to this brief and explanatory guide to what NFTs mean and why they are so unique.
An NFT is not your standard cryptocurrency, and that makes it so loved by many.
Let’s dive in at what it actually stands for and how it works. Once we clear this out of the way, we can continue.
What is NFT?
NFT means non-fungible token, and non-fungible means that this token is unique and can’t be replaced. Let’s take Bitcoin, for example. Bitcoin is fungible since you can trade your Bitcoin for another Bitcoin. You will end up with Bitcoin in both cases.
However, NFTs are more like Yu Gi Oh cards- one-of-a-kind trading tokens that if you trade one for another, you will receive a token different from the one you gave away.
NFTs can be everything. They can be a jpg image, music, or digital art. You can be an artist, create a 3 minute short YouTube video by adding your images and music. BOOM. You can now sell this video as an NFT at an excellent price if it brings value to the rest of the community. It’s just like getting paintings at an art gallery but cooler.
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More technically speaking, most NFTs are part of the Ethereum Blockchain. Even though Ethereum is a cryptocurrency, its Blockchain supports NFTs. Other Blockchains can also implement their own NFT versions, so Ethereum is not the only one.
What is the hype around NFTs?
The hype around NFTs is so significant because, like everything we buy and collect, NFTs hold the same purpose. Collecting and buying is fun, and it can be a sign of wealth or a sign of you supporting someone or a brand, for example. And just like art, the value of NFTs can increase or decrease over time, and you can trade your NFT for a lot of money.