Non-Fungible Tokens (NFTs) are digital assets that are unique, non-interchangeable, and impossible to replicate. As a result, they are becoming increasingly popular in the world of digital art, gaming, and other digital media. NFTs provide a secure way to own and trade digital assets, allowing creators to issue and sell digital art, collectibles, and other digital items. They also enable users to prove ownership and authenticity of digital assets, making them an ideal solution for digital art and collectibles. NFTs could be the future of digital asset ownership.
1. NFT stands for non-fungible token.
NFT stands for “non-fungible token”.
Non-fungible means that something is unique and can’t be replaced.
NFTs are unique, there’s only one in the world and its existence is recorded in the blockchain.
A blockchain is like a big, long list that’s stored all over the internet.
It records each item and has a code for who owns each one!
Embed from Getty Images2. An NFT is digital content.
An NFT can be any type of digital content.
From digital art to a sound recording!
They can only be seen and heard digitally – like on your device or on virtual reality goggles!
Embed from Getty Images3. Most NFTs have a cost attached to them.
The person who creates an NFT can make it available for free, or more often, they charge for it.
It’s the same as buying an original painting from a shop – and just like that painting, once you own an NFT, you can sell it!
You can’t spend your physical pennies and pounds on them though…
4. NFTs are bought with cryptocurrency.
Have you ever heard of cryptocurrency? This is how NFTs are bought.
Cryptocurrency is digital money. You can’t physically see it like you can with your pocket money!
However, cryptocurrency can be bought with money through a digital wallet.
There are loads of different cryptocurrencies. You might have heard of Bitcoin which is a very popular one!
Cryptocurrency can also be exchanged back into physical money.
Embed from Getty Images5. An NFT proves that the digital content is one of a kind.
If you own an NFT, it means that the digital content is one of a kind!
For example, if you had the Mona Lisa painting framed in your living room, it would be a copy. The real one is in the Louvre Museum in Paris!
If the artwork you owned was an NFT, you would know that you are the only one to own it!
There are some exceptions when the artist or creator creates more than one. So, they might design 10 of the same artwork. This will always be made known to anyone buying the NFT.
Embed from Getty Images6. The internet knows you’re the owner.
NFTs can be any type of digital content – for example a picture or a video!
Like lots of digital content it can be copied and sent around to others (whether it should be or not)!
However, when you buy an NFT it records that you’re the owner on the blockchain.
Blockchain technology is a permanent record of who owns each NFT.
7. NFTs are sold on a marketplace.
You can’t just go into a shop and buy an NFT.
They tend to be sold online through special websites called marketplaces.
A digital wallet would be needed that works with that specific marketplace website…
…and of course enough cryptocurrency to buy the NFT!
Embed from Getty Images8. Each NFT cost is different.
All NFTs are worth different amounts because every NFT is unique!
It starts with the creator setting the price, but just like a real item, you can then sell it on to someone else once you own it.
The price is usually decided on how many people want the NFT and how many there are to sell. This is known as supply and demand.
Some can be worth a few pounds – to millions! Woah!
Embed from Getty Images9. NFTs are often kept for a long time, in hope that they grow in value!
NFTs are often kept for a long time, because the owner hopes they can grow in value.
It’s a bit like having a PokΓ©mon card collection and hoping that one day you might be able to sell them for more than you bought them for!
Or maybe a rare coin collection that is worth so much more than when they were first released.
Some people sell their NFTs straight away if they think they can make a profit. Clever!
Sometimes though, just like things that you have at home, you buy it because you like it – or you wanted to support who made it – and you’re happy to keep it whatever the future price might be.
Embed from Getty ImagesDo you have any of these rare coins?
10. Anyone can create an NFT.
Anyone can create an NFT.
It’s digital content after all!
If you were going to create some digital artwork, what would you design?
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