What Are NFTs And How Do They Work?

What are NFTs and how do they work?

What are NFTs And How Do They Work?

So You’re Looking For Answers to what an NFT is, you’ve scoured the internet and didn’t come across anything valuable. I’m assuming that perhaps you found out you can become rich by selling an NFT. Well in this post I’m going to clear all of your misconceptions about NFTs and ill help you get rich by selling NFTs, possibly.

What is An NFT?

In very simple words, an NFT, short for “NON FUNGIBLE TOKEN” is a digital piece of content stored on a blockchain, using the same technology as the popular cryptocurrencies. What’s a non-fungible token? It’s something that cannot be exchanged or traded. It has its own uniqueness. Unlike cryptocurrencies such as Ethereum and bitcoin, which can be bought, exchanged, or traded for an equal value, NFTs don’t operate that way because each NFT has its own rarity.

NFTs can take the form of artwork, collectibles, music, GIFs, gaming items, and/or skins. But the most popular ones are digital artwork, collectibles, and gaming items.

Now you might be thinking, who introduced NFTs? Well, The wildly popular cryptocurrency Ethereum introduced NFTs, why exactly? Well someone at Ethereum decided to keep a digital ledger of the price history of Ethereum, and hence, NFTs were born in 2014.

At first, these NFTs weren’t very popular. Then Etherium made a game called cryptokitties. Sounds funny right? It isn’t, Ethereum made millions of dollars through this game. How? Well, the game had cats. Digital Cats. Now those cats multiplied and reproduced among themselves, and hence, each cat had its own uniqueness and authenticity. But here’s the interesting part, People used to buy and sell those poor little kitties and that’s how NFTs became popular.

Hey now you’re bombarding me with questions, yes NFTs are 100% legal, once you buy an NFT (more on that later) , you receive a digital certificate that entitles you as the owner of the particular NFT. They operate on the same technology like Ethereum and bitcoin which makes them extremely safe and yes they are Legitimate but the downside is that they don’t have any kind of legal documentation, if that’s what you were wondering, NFTs are only perceived as a symbol of status.

Alright I get what an NFT is now, but are NFTs profitable? Can I make money on them?

I’m glad that you asked this question. You see NFTs are rare items. The rarer they are the more value they have. So it entirely depends upon what kind of NFT you’re looking to purchase or sell. Some people create their own NFTs, like this boy in Indonesia, who made just over a million dollars selling his photo as an NFT. So it can be anything. And it depends upon how rare people perceive your NFT. Anything can be profitable if it’s put in front of the right kind of people, but generally, NFTs aren’t profitable, like I said, they have to be super rare for them to actually make money.

Are NFTs Worth Buying?

Again, it depends upon what kind of NFT you’re buying but generally, they’re not worth it. If you’ve got spare money, then you should buy NFTs but don’t expect too much. Real money is where you create your own NFT.

How is money made from NFTs? What is the Exact Process?

So you’ve made up your mind.  It seems like a very simple process but it’s a bit more complicated. The first step is you have to create a unique piece of art, anything digital. Then you signup for a contract with the blockchain company. The contract is labeled as a “smart contract” which entitles you as the owner of the NFT. Any time someone buys your NFT. the ownership of that particular NFT gets transferred to the buyer. I know it seems very simple but it’s much more complicated.

Will I get the ownership as soon as I buy an NFT?

Aye, NFTs only have one owner at a time. Just like real artwork. But the catch is that the owner can duplicate the NFT any number of times he wants without having to worry about copyright infringement because NFTs don’t have one!

The Sole purpose of NFTs is to give the owner a symbol of “status” or “superiority”.

Are NFTs similar to cryptocurrency?

They’re similar and they’re not similar. NFTs operate on the same blockchain technology as cryptocurrencies. They’re highly secure just like cryptocurrency. But you can’t just go and buy one. You have to do your research first and if you ask me, then I’d recommend that you get into trading cryptocurrency first since you’ll be using the cryptocurrency itself to buy the NFTs.

You have to be very careful with NFTs because if you don’t manage them right then you might not be left with anything.

I’m ready to buy an NFT, how do I buy one?

First you have to visit one of the popular NFT marketplaces. Opensea, Rarible, and Nifty Gateway are some of the most trusted platforms for buying/selling NFTs. But if you’re just starting out with NFTs then the best marketplace for beginners is Opensea.

What is the best NFT to invest in?

Like I said before, it depends upon what kind of NFT you’re looking to invest in. Most of them aren’t profitable at all but some good NFTs to invest in might be collectible or gaming skins because people are crazy when It comes to gaming and collecting rare stuff.

What is NFT Art and How to create one?

 It’s easy, all you have to do is be a bit creative. Did you take a very rare picture? Perhaps you created an astounding logo or a picture with Photoshop. Maybe you made funny audio. It could be literally anything digital.

Final Thoughts on NFTs

When it comes to my personal opinion, I wouldn’t advise anyone to invest in NFTs unless they have some cash to spare. Because You have to know the ins and outs of anything when you’re making an investment. If you believe that NFTs can make you rich, then go for it. Do your research, research on cryptocurrency, NFTs, marketplaces, and become an expert on the subject. Then start investing.

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