Hi, Chiboy here again.
For OGs and mostly newbies in the cypto ecosystem, you might have heard of NFTs. Ever wondered what they are?, why it has caused controversy? And how they work?
Well, take 3mins and read through to educate yourself.
WHAT IS AN NFT
In the ecosystem of cryptocurrency, NFT (non-fungible token) is a digital token that is a type of cryptocurrency. But unlike common cryptocurrenies like Bitcoin, Ethereum, Litecoin, an NFT is unique and can not be exchanged like-for-like (hence non-fungible). Like-for-like here means it excludes any effects of expansion, acquisition, or other events that artificially enlarge it sales.
In essence, an NFT is a collectible digital asset that holds value as a form of cryptocurreny just like Art seen as value-holding investment. NFTs store information that elevates them a bit above pure currency and this feature makes it promising. It could take any form which may include digital art, music file, videos etc or anything unique that could be stored digitally and be thought to hold value.
WHY IS IT CONTROVERSIAL
NFTs have raised concern because of the enormous amount of energy used in creating them. However, a lot of money can be made from them. According to CryptoArt.wtf, the creation of “Coronavirus” an NFT piece consumed a lot of energy enough to power the European Union residents for two weeks. Hence, many are worried about its impact on the environment.
HOW NFTs WORK
According to Coggan, NFTs are part of the Ethereum blockchain so they are digital token with extra information stored in them. These information could be in the form of JPGs, MP3, MP4 etc. Because they hold value, they can be bought and sold just like arts. However, their value depends on market and demand.
Furthermore, it is not safe to think, there exist only one digital version of an NFT art available. Also, no one should think snipping an NFT image from the web would earn him money because it won’t contain the unique information that makes it an NFT and part of the ethereum blockchain.
Having read to this point, you must be wondering if you can buy NFTs.
Yes, you can buy NFTs on different platforms depending on what you want. However, you will need a wallet specific to the platform you are purchasing the NFT from.
Here are some platforms that sell NFTs
. Bakery Swap
. NFT ShowRoom
. Digitaltrading Cards
. VIV3
What can you take from this read? NFTs are promising and lucrative even thought they pose environmental challenge. And soon it will take over. Also, bear in mind that anyone can create NFTs with the right tech devices like powerful laptops and powerful drawing tablets.
Thanks for reading and hope you learnt a little from it.