You must be asking yourself what is an NFT? The questions started to return recently after a wave of gains hit the cryptocurrency exchanges. Many predict that the coming year is going to be a bull market, meaning that increases are expected. At the same time as the rise of Bitcoin, the prices of NFT works also started to rise.

NFT Non-Fungible Tokens Unique tokens stored and backed up by blockchain.

In the following picture you can see the rate of increases and trading rates using the Forcas 500 NFT index which summarizes trading in the various currencies. So just before the madness begins, you should also learn a few key concepts.

What is the definition of NFTs?

NFT stands for Non-Fungible Token. Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible and exchangeable on a one-for-one basis, NFTs are unique digital assets. They represent ownership or proof of authenticity of a specific item or piece of content, such as digital art, music, videos, and more, using blockchain technology. A sort of copyright and exclusivity system for technological products.

What is blockchain technology?
NFTs are built on blockchain networks, mainly Ethereum. Blockchain acts as a distributed ledger that records all transactions. When an NFT is created, or ’embedded’, its information is stored on the blockchain (chain). This includes its provenance, ownership history and authenticity, ensuring that each NFT is distinct and tamper-proof.

Digital ownership and scarcity

One of the core concepts behind NFTs is digital ownership. When you purchase an NFT, you purchase the ownership rights to the unique token, not necessarily the item it represents. This ownership is exclusive, thanks to the blockchain’s ability to verify and display the token’s history and authenticity, creating a sense of scarcity and value, especially for digital art and collectibles. That is, there is no problem here to prove that the product you purchased is completely original.

Smart contracts
NFTs use smart contracts, which are self-executing contracts with the terms of the agreement written directly into code. These contracts can automate certain operations, such as transferring ownership and managing royalties. For artists, this means they can automatically receive royalties whenever their NFT is resold, providing a new revenue stream, markets and trade.

Why do people want to invest in NFTs?
The reasons for investing in NFT are varied. From the desire to invest in art just like you invest in the real world to the desire to be part of something that is happening. Probably the other reason is that it is clear to everyone, that the whole field of markets and commerce.

Why do people want to invest in NFTs?
There are several justifications for purchasing NFT. From the urge to participate in an event to the wish to invest in art the same way you do in the real world. The other reason is probably that everyone wants to be a part of a revolution because it is obvious that the field of NFTs as a whole is still in its infancy and that the true value of the investments is only now starting to emerge.

When the worlds of WEB3 and Metaverse will develop and leave the domains of the world’s savvy community and become the common domain, the value of selected NFT products will increase and with it the options to use them. You remember that we wrote about Apple Vision Pro, products of this type will accelerate the implementation of NFT in the world and create a new NFT economy. Think that anyone who sees you with the special glasses, will be able to see that you are wearing a shirt with a print of popular NFTs and he will be able to know that it is an original product, just like purchasing an expensive Rolex watch that shows the time exactly like a Mali Express watch.

Where do you buy the toucans?

NFTs are bought and sold on specialized platforms, such as OpenSea, Rarible and Foundation. These markets allow users to mint, list, buy and sell NFTs. The value of NFTs is subjective and can vary depending on demand, rarity, the reputation of the artist and other factors. Transactions usually occur using cryptocurrencies and can range from a few dollars to millions.

In conclusion, NFTs—which are enabled by blockchain technology—represent a dramatic shift in the digital ownership and veracity of assets. They present new opportunities for artists, collectors, and investors, but they also have a variety of unique drawbacks and issues to take into account, particularly when it comes to the extreme market volatility and environmental impact that they have in comparison to other wise investments.