NFTs for Dummies

It’s been a while now since the rise of the NFT, but it’s fair to say that many people have let this pass them by. Like the fidget spinner and other trends, many believed that the NFT wasn’t here to stay, but it most certainly is something that will be around for the long haul. This is why it may now be worth you learning a little more about the technology and the promise behind these digital possessions. Read on to get to grips with this new age of the digital asset, how it works and whether it’s worth your investment. 

NFT Basics

There are two main things that you need to know about NFTs. The first is that it is purely in the digital world and that ownership of an NFT will not give you access to anything physical. The second is that digital assets such as these do really have value, and are trading at astronomical rates on the NFT marketplace.

They’re doing so because many people truly believe that the NFT is the future. It’s a Non-Fungible Token, which essentially just means a digital code that you will own and that no one else can claim to own. Many people believe that NFTs will be worth much more money in the future than they are today, which is precisely why they’re putting their faith in the technology now. 

Technology 

So what is the technology behind the NFT? There is a handful that are worth mentioning here. The first is cryptocurrency. You can only purchase NFTs with Ether, which is a digital currency that’s a little like Bitcoin. You’ll need to head to a crypto exchange to part with your fiat currency and buy Ether before you can buy an NFT. 

The next technology is the blockchain – the technology that cryptocurrencies are built upon. This is a distributed ledger that essentially takes notes of every transaction that happens across the world in this space. This is what guarantees your ownership of your NFT, because everyone with access to the ledger will be able to trace your NFT back to you. Finally, there is hope that NFTs will be key digital possessions in the metaverse, which some people believe is the future of the internet. 

Should I Buy an NFT?

As with any asset of investment, you should always do your research before committing. You should be aware that most investors see the NFT as a high-risk investment, as it’s still unclear whether this is a market that is booming towards a bubble, or if this is still the time at which early investors could become very, very rich in the future. 

As well as that research, it’s also worth considering what you can afford. There are some seemingly valueless NFTs that are actually selling at incredibly high prices – way beyond most people’s price range. There are others that are selling at an affordable rate, but may not be worth a dime in the future. Be careful, do your research, and ensure you’re purchasing from a reputable marketplace if you do decide to dabble in NFTs.

These tips should be of use to those who are new to the NFT space.