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NFTs have seemingly taken over the web in recent times. They seem to be referenced everywhere and there are always reports about how someone sold a silly looking piece of digital art for millions of dollars. If all the buzz about NFTs has left you feeling adrift and alone, you’re at the right place. This is a very simply guide for beginners that are all sailing in the same boat as you.
With this information, you’ll get a basic idea of NFTs. This is good enough to even get you started on visiting an NFT marketplace and maybe even buying your first NFT.
To Understand the Non-Fungible, Let’s First Understand the Fungible
At this time, your knowledge on NFTs may be limited to its full form: Non-Fungible Tokens. But, what does non-fungible even mean? Wait…what does fungible even mean?
We’ll define what it means to be fungible in order to properly comprehend non-fungible tokens. In finance, the term “fungibility” is typically used to describe things that are interchangeable and cut from the same cloth, in a sense. Fungible things could further be sub-divided into their components.
Any fiat currency would be a stereotypical example of something that’s fungible. The Euro (€), for instance, is a fungible item since a €5 euro note is interchangeable with other euro notes and identical to other €5 notes. A €10 bank note can be further divided into two €5 bank notes. Therefore, currencies like the Euro and the US Dollar are fungible. Likewise, even Bitcoin and other crypto currencies are fungible since the same principles of interchangeability and granularity prevails with crypto currencies too.
Now, let’s consider something that’s non-fungible. Let’s say you have a baseball card. It is non-fungible because the value of the card depends on its condition and rarity. If your card is particularly special and in mint condition, it could be worth a lot more than some other baseball card or the same card in worse condition. Likewise, your pet dog or your motorbike is also non-fungible. They’re not interchangeable and are distinguishable.
An NFT aims to transform a digital asset into this. The use of cryptographic technology ensures the authenticity of the items you hold. The token that is associated with that piece of art, collectable, or digital asset is exclusively yours. And while we’re on the topic of technological innovation, we should also acknowledge the one industry that’s equally forward thinking: the online gambling sector. A multi-billion-dollar business, it’s as sought-after as it is competitive, thus staying ahead of the game is part of what sets a casino apart from its competitor. This is where NFTs step into the picture.
You can think of NFTs kind of like owning art in the real world. If you have an original Da Vinci artwork, there’s only one of it. It has a market value and it also has sentimental subjective value. There can be counterfeits of the same art piece, but there’s only one original and only the original has any real value. In the same sense, owning an NFT is different to having a screenshot or copy of the same NFT. The screenshot has no value, but when your name is registered as the owner of the NFT in the blockchain, there’s no doubt that you own the original and only you receive any proceeds from selling it.
<H2> So where is the Data About Who Owns an NFT stored? </H2>
NFTs are tokens constructed from segments of incredibly sophisticated algorithms. NFTs, as previously said, signify uniqueness and immutability as opposed to a fungible crypto-currency like Bitcoin. Each NFT is a digital signature created using a cryptographic method, which adds still another level of rarity and uniqueness.
Digital weapons, properties, creatures, cards, artwork, you name it – once set, they cannot be changed. Data that is immutable cannot be modified, forged, or altered in any way. Every computer, or node, in the network records the transaction as it is encrypted on the blockchain. You will have all the previously recorded data if you only have one node with the blockchain ledger maintained. The data will be stored on other nodes even if your PC is hit by a meteor and becomes dust.
What are NFT Marketplaces?
If you want to buy an artwork in the tangible world, you might visit an art gallery. If you want to buy or sell your car, you’d probably go to a car dealership. In the same way, the NFT marketplace is where you can buy or sell NFTs.
An NFT marketplace is a platform that makes buying and selling NFTs straightforward. Usually, these tokens can be bought or sold at an agreed-upon price. You will require a crypto-currency wallet to store and exchange your finest NFT tokens in order to use an NFT marketplace. Users must register for an account, submit their digital creations, and then use the marketplace to sell their goods. Specialized marketplaces tend to be more well-liked than traditional ones since they offer everything a customer would need, including competence in advertising online artworks and a focus on certain target groups.
