A Guide to understanding NFTs

What are NFTs

Non-Fungible Tokens or NFTs are a digital form of token. Secured with a digital “Signature” by the owner. NFTs are a form of simulated scarcity for online media. It puts a price tag on certain online videos, pictures, GIFs, Etc. Once you have bought an NFT the item is yours. If an artist sells their art as an NFT, then you can buy that piece of art and have “Bragging rights” over the NFT. This being said the original owner of a form of art, video, or song still has copyright over the item. This concept works when there is a limited supply of things, which NFTs create, however, NFTs can be worked around by downloading or copying the original digital art.

 

How do NFTs work

NFTs work by using blockchain technology. NFTs work by minting a form of media like the before-mentioned Arts. However to mint an NFT it must have both physical and digital forms of media. When an item becomes an NFT, then it begins to gain worth. When an NFT is purchased ownership of the item is given to the buyer as an official encrypted form of that item. Not just a simple copy, an original.

 

The difference between crypto and an NFT

NFTs and Cryptocurrency are similar in their relation to a blockchain. Both use blockchain, but NFTs use blockchains as encryption, while Crypto uses it for a secure transfer of fungible money. The non-fungible part of NFT means that a singular NFT will not be Equal to another or the same NFT. Crypto coins like bitcoin for example are equal, but an NFT can’t be similar to itself. NFTs can be summed up as an art collector’s process.

 

Security of NFTs

NFTs use a digital wallet to store the token. However, there are reports of people getting their NFTs stolen. these people may have been scammed to give up their passwords to their digital wallets. After all, a safe’s password can’t be broken if the thief does not have the password. Other problems of NFTs would be people posing as the creator of a piece of art and selling the art as an NFT. This can be remedied if the buyer makes sure that the NFT buyer checks if the Artist is selling their art. 

 

The History of NFTs

The first NFT was created in 2014 by Kevin McCoy. His NFT is called Quantum and it’s worth 7 million dollars. However, in 2012 the Idea of an NFT was created. It was called a Color coin. Effectively Color Coins used the Bitcoin Blockchain to do what NFTs do. Back in 2014, Counterparty, founded by Robert Dermody, Adam Krellenstein, and Even Wagner, is a financial platform where you can create your tradable currency. This was also built by using the Bitcoin Blockchain. Counterparty went to work with the creators of Spells of Genesis and Trading cards. Eventually in 2016 Rare Pepes were people who started adding assets to the memes and trading them. 2018 – 2021 was when the public started noticing the art collecting-related use of NFTs.

 

How do NFTs affect us today?

Today NFTs are seen as a controversial topic. NFTs have been experimented with over the years. Nike has been working on a form of NFT-based proof of ownership. If things go well NFTs may become a type of digital verification for car or house ownership. They might replace or add on to lease agreements or anything that has to do with owning an expensive thing.

 

Should you buy NFTs?

It depends if you enjoy collecting art then NFTs may appeal to you. Alternatively, you could hold on to an NFT for monetary reasons, and sell an item when it gains a high enough wealth. NFTs are chaotic when it comes to how tokens are worth going up. Chances are that an NFT could go straight to zero.