Non-fungible Tokens or NFTs have been in the news a lot recently and it might be the right time to explore what it really is. And all the news of recent is associated with monetary transactions in millions of dollars. Not a few millions of dollars–one artwork sold for $69 million! Yes, it is that interesting.

What are NFTs?

A Non-fungible Token or NFT is a unit of data stored in a blockchain. This data can represent any digital data such as a song, artwork, digital copy of a book, image, and so on. And such, these tokens can be bought and sold to purchase their attached digital asset.

NFTs, as the name suggests, are non-fungible. In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part. For example, $10 can be divisible into 2 $5 coins and the total value remains unchanged. With NFTs, this isn’t the case. There are no more divisible parts of an NFT available and one NFT cannot be interchanged with one another.

How Do NFTs Work?

The non-fungible tokens can be assigned to different digital assets as mentioned above. Thereafter, these tokens can be duplicated endlessly, thus an infinite number of copies of the ‘original’ digital asset can be created and traded online. In whichever case, the buyer will not be owning any physical asset, but rather a digital asset.

An artist by the name Beeple sold one of his digital artworks by the name ‘Everydays: The First 5000 Days’ for a price of $69.3 million in March 2021. What makes this digital token of the artwork special? Nothing. The buyer just owns the ‘original’ digital copy of the artwork.

There are millions of copies of this digital artwork online, which usually should render the value of the artwork to be zero. However, with digital currency such as NFT and various cryptocurrencies, the name of the game is ‘speculation.’

The American rock band Kings of Leon announced that their 2021 album ‘When You See Yourself’ will be released in the form of NFT.

On 19 February, an animated Gif of Nyan Cat – a 2011 meme of a flying pop-tart cat – sold for more than $500,000.

Twitter founder, Jack Dorsey’s first-ever Tweet has been bid up to $2.5 million in an auction to buy the Tweet itself.

just setting up my twttr

— jack (@jack) March 21, 2006

Why buy this Tweet? We have no idea.

But , there definitely is traction towards NFTs right now, and that’s the best news for NFTs.

Where to Trade NFTs?

There are a few marketplaces to trade NFTs to buy digital assets. Some examples are; Nifty Gateway, MakersPlace, SuperRare, OpenSea, Decentraland, and Rarible.

King of Leon is using a platform named YellowHeart for their album sales.

There are many more platforms with varying features, some depending on the type of digital assets being bought and sold.

Can You Buy/Sell NFTs?

Yes, anybody can. Non-fungible Token blockchain operates on Ethereum cryptocurrency, so there will be a process to convert dollars into NFT.

Can You Create Digital Assets to Sell for NFTs?

Yes, if you have the creativity to create something digital–an artwork, music, a song, an e-book, or whatever you can think of, you can list it on any of the above NFT marketplaces and hope for a good bid.

But, be aware, there’s nothing stopping from a buyer duplicating your creation and selling it on the same marketplace. It might change in the future, but the nature of digital assets themselves makes this a very difficult exercise.

So what do you think about Non-fungible Tokens and what it brings to this new age of digital currencies? Let us know in the comments below.