NFTs have been the big topic in the crypto scene for the past months or now almost a year. However, it is difficult to understand why there is such hype around NFTs, even though, they are mostly only a picture on a phone. This post is going to explain what an NFT is and why there is such hype around it.
What does NFT mean
NFT has the meaning of “Non Fungible Token”. In order to understand the exact meaning of “Non Fungible Token” we have to understand what “Fungible” means. According to Google, means fungible, that something is replaceable by another identical item. The perfect physical example of the word “fungible” is a dollar.
It does not matter what kind of dollar you possess. Your dollar has always the value of 1 dollar and this makes a dollar fungible. Nevertheless, since NFTs are “Non Fungible” there can only be unique tokens because that makes them “non fungible”
What is an NFT and how do they work
Nfts are digital assets that can be a lot of different things like collectable cards, soundtracks, tweets or a simple picture. NFTs work nowadays because they can be stored on your blockchain via smart contract. You preserve the rights of your NFTs assets on the blockchain in order to prove that you are the owner of the NFT.
The only downside is that NFTs still have to be virtually stored, and you only have the unique private key of your NFT stored on your blockchain. This leaves NFTs vulnerable because hackers could still hack the server where all the NFTs are virtually stored.
Hype around the NFT
The hype around NFTs has multiple aspects. On one side are NFTs, a great place to invest because there are a lot of gains possible if you buy the right NFTs. On the other side shows an expensive or desired NFT also status. A good example of this are bored apes these NFTs went viral after a lot of famous people like Eminem or Jimmy Fallon bought this NFT. After that, a lot of other people would have also liked to possess a bored ape and this increased the demand, for bored apes and eventually also the price.
Where and how can NFTs be bought
NFTs can only be bought and be sold with cryptocurrencies that actually have smart contracts because otherwise smart contracts are here to automate the selling and buying process on the blockchain. A few cryptocurrencies with smart contracts are the following.
- Etherium (ETH)
- Solana (Sol)
- Cardano (Ada)
The biggest market of NFTs has currently Ethereum because they have started with NFTs since 2017. The only problem with NFTs based on Ethereum is that the transaction fees are really high.
Here are the websites where you can buy and sell nfts with Etherium, Solana and Cardano.
OpenSea: OpenSea, the largest NFT marketplace
Good and bad things about NFTs
Good things about NFTs are the following things
- Great new market
- You can have great profits
- Ownership is clearly declared
- Shows status
The negative parts of Nfts are
- It is a highly risky market
- NFTs are all saved on one server
- It is superficial
- Transaction fees can be very high (especially with Etherium)
My favorite NFTs
After all, my favorite NFTs are Cnfts that are built on the Cardano blockchain. The main reason why I believe in these NFTs is that Cardano is here to stay and will not perish in the future. Another very important reason why cnfts are better than other NFTs that are built on Ethereum or Salano is because the transaction fees are very low and this makes the nfts more profitable.