One of the hottest digital trends right now are NFTs, and chances are you’ve heard of this acronym, even if you don’t know what it means. So, here’s our guide on NFTs for beginners, to help you understand this phenomenon, and how it fits into the bigger blockchain picture.
Getting started: what is the blockchain?
It would be rare to find anyone that hasn’t heard about the blockchain, but we’ll start with a brief explanation of it before we get to the basics of NFTs for beginners.
Blockchains are a way to store data to keep track of it. They’re decentralised databases, used to store pieces of digital information (called blocks) in chronological order. Control is spread across multiple different entities, rather than remaining in one entity’s control, and buyers and sellers can directly deal and trade with each other with no middleman. NFTs, being purely digital, are created, purchased, and sold with blockchain-built cryptocurrency like Ethereum and Bitcoin.
So, what are NFTs?
NFT stands for Non-Fungible Token. If that doesn’t help clear things up, we’ll expand on this a bit more.
Non-fungible means something that is unique and can’t be replaced by something else – it’s one-of-a-kind. An NFT is a digital code that represents a collectable asset, and the blockchain keeps track of who owns and trades what NFTs, and their value.
NFTs can be purchased, sold, and traded at will, just like any other collectable (such as a one-of-a-kind collectable sports card or piece of unique memorabilia).
What are some common examples of NFTs?
Some common examples of NFTs, to put it in perspective, include unique digital items such as:
- Digital art
- Video game assets
- Sports collectables
- Videos and animations
It’s the digital equivalent of collecting fine art; the key here is that the NFT is unique, and owned by you (if you bought it, that is). You may have heard of NFTs that have sold for thousands or millions of dollars, and while that may sound strange, bear in mind the price collectors will pay for fine art. In this digital world, NFTs are a natural progression for those who possess a collector or investor mindset – ownership of an original digital piece of work. Sure, it could be copied, but it’s much like the Mona Lisa; there are plenty of copies, but only one original.
The future of NFTs
Whether or not the popularity of NFTs will continue to grow is uncertain, but the blockchain and cryptocurrency is certainly showing no signs of losing its audience, with Statista reporting that nearly 30% of Australians own cryptocurrency as at April 2022.
NFTs may or may not be on your radar but are a sign of the ever-increasing popularity of the blockchain, cryptocurrency, and its evolution into mainstream culture. In fact, many big brands, tech companies and game developers are jumping on the wagon to create them to engage their audiences in increasingly new and varied ways. NFTs are a hot commodity right now, and their volatility in the market is what makes news of them fascinating to follow.
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