Breaking down how NFTs and the metaverse work
With all the buzz being on the Metaverse recently, more and more people are stepping into the crypto space, which includes blockchain and the ever-intriguing NFT. For those interacting with these for the first time, it may be confusing, but NFTs are actually very simple to understand.
They are just digital assets that represent real-world objects like art, music, and in-game items and videos. NFT stands for non-fungible token, which essentially means that it is unique and cannot be replaced by anything else. This is different from cryptocurrency because those can be traded and exchanged for one another, but each NFT has a digital signature that makes it impossible for it to be exchanged for or be equal to one another.
Some believe that NFTs are worthless because digital art can be screen shotted and recorded, and it will be the exact same thing as the person who owns it, but the truth is that everyone who copies the file will not actually own the NFT, as they are all linked on a blockchain with detailed ownership receipts. This means that only the person who actually buys the NFT will be able to utilize its value.
NFTs and Blockchains open up so many possibilities, as they allow budding artists and creators to monetize their creations. In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. Different brands like Taco Bell and Charmin have even created their own NFTs and auctioned them out, selling out in under a couple hours.
NFTs are certainly interesting, but should they be considered as realistic investment opportunities? Although they are risky because the future is uncertain, the potential and what is yet to explore is so vast that it may be worth it to invest small amounts to try it out. Some NFTs such as the cryptopunks and bored apes have even sold for thousands and millions of dollars.
All in all, NFTs or non-fungible tokens are taking over the internet by storm, and these digital assets are a very intriguing topic, with countless investment possibilities.