What Are NFTs

NFTs (non-fungible tokens) are like physical collector's items that are treasured because of their unique scarcity, only with NFTs, these “assets” are digital. ‍ Unlike buying an oil painting with fiat currency like the US dollar that one can hang on a wall, buyers purchase and sell digital artwork, music, real estate, in-game items, and videos to name but a few, and use cryptocurrencies to initiate the transaction. ‍ “So, are NFTs cryptocurrency?” Cryptocurrencies are fungible and have an equivalent value attached to them — 1 Bitcoin equals 1 Bitcoin. This means crypto can be traded or exchanged for one another much like how you’d exchange your local currency for US dollars when traveling to America. ‍ Whilst NFTs are generally encoded using the same underlying processes as many cryptocurrencies, they are non-fungible and typically one of a kind or one of a very limited collection so there is no equal value that one can simply attach to them. ‍ Interested in learning more about the terminology behind NFTs? Check out our NFTs Glossary here!

An NFT’s Value

NFTs have unique identifying codes or a digital signature that lives on the blockchain (a digital public ledger that records transactions) which serves as a built-in authentication of sorts and ultimately, proof of ownership. ‍ The truth is that anyone can right-click and save an NFT that you create or own, but in a world of copies, the only thing that really matters is owning the original — and being able to prove it! ‍ Aside from verifying ownership, demand, scarcity of NFTs available in the collection, additional perks like physical copies of an NFT and merchandise, as well as the ability for fast transactions to take place in secondary marketplaces can also increase an NFTs value. Learn more about the benefits and innovation of NFTs here!

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