The continuous popularity of cryptocurrency has taught us many things, from sending money, earning through trading, and even playing in an ETH gambling casino. However, there are areas and countries that restrict the use of cryptocurrency or have limited use of this digital asset.
In 2021, non-fungible tokens, or NFT, have joined the global cryptocurrency market and have grown their value as much as cryptocurrencies do. For some, NFTs are just overpriced jpeg files. But for NFT enthusiasts, these are not just investments but can be another way of earning crypto. These are similar to expensive artworks, only made digitally.
Many are already familiar with crypto, but only a few can understand NFTs. Here are some things to know:
What are NFTs?
Like crypto, an NFT is also a digital asset that uses blockchain technology but in the form of digital artwork. Every NFT is unique and cannot be replicated. An NFT is not limited to images. It can be a song or anything that can be digitized.
People buy NFT because of its uniqueness. Though these are singular, there are certain points why an NFT is rare or has a uniqueness to others.
Because of blockchain technology, NFTs cannot be stolen. Even when someone screenshots your NFT and tries selling it to a marketplace, it would not have any value. This will be verified in the blockchain and will be listed to a different owner. In short, the screenshot NFT will appear as stolen.
Another advantage of blockchain technology to NFTs is artists who made these digital artworks are compensated properly.
NFTs and Cryptocurrency
While both are considered digital assets, they differ from one another. NFTs are non-fungible, and crypto is fungible. This means crypto can be exchanged and has a single value. A single bitcoin is equal to one bitcoin.
With NFT, it is different. These are created and minted from different objects. In the physical world, it is similar to a collector’s item. Since each one is unique, there cannot be two owners of a single NFT.
What relates NFTs and crypto is NFTs can be bought using cryptocurrency. Before you can purchase an NFT, you need to purchase crypto first. Each blockchain uses a different cryptocurrency.
When the NFT market was just starting, it depended on the crypto market to determine an NFT’s value. By the time NFTs became popular, their values did not depend on crypto markets anymore. There are times when crypto markets go up, but NFTs’ values goes down.
Selling and Buying NFTs With Cryptocurrency
Once you have funded your crypto wallet, you can start buying NFTs from popular NFT marketplaces.
Opensea.io is a platform where you can freely browse NFTs. All you need to do is create an account, and you can get started. There are also NFTs made by new artists on this platform.
Another NFT marketplace is Foundation. Compared to OpenSea, you need an invitation from a fellow artist before you can post and sell your digital creations. Because Foundation has a cost of entry and exclusivity, NFTs sold in Foundation tend to have higher costs.