What Are NFTs?

Non-fungible tokens (NFTs) are cryptographic assets on a blockchain with unique identification codes and metadata. “Non-fungible” simply means that an item is unique and can’t be replaced with something else. For example, a dollar note is fungible. You can trade one dollar for another, and you’ll have exactly the same thing. However, a one-of-a-kind baseball card is non-fungible because if you traded it for a different card, you’d have something completely different. But how do NFTs essentially work? When you break it down, most NFTs are part of the Ethereum blockchain. We all probably know of the cryptocurrency Ethereum, but the one thing that makes Ethereum unique from Bitcoin, for example, is its ability also to support these NFTs. Ethereum stores extra information and metadata that helps them work differently from other cryptocurrencies. For those wondering what can be contained in NFTs, well, NFTs can really be anything digital, primarily digital art such as drawings, music, paintings, and even tweets. 

How to Buy NFTs

The first step to owning NFTs is owning cryptocurrencies. However, most NFTs can only be purchased with Ether, so owning some of this cryptocurrency and storing it in a digital wallet is the first thing you want to do. The second step would be identifying the right marketplace to buy and sell NFTs. Depending on which marketplace you choose, you’ll be able to purchase different types of art or collectibles. NFT markets include OpenSea, Rarible, SuperRare, and Nifty Gateway. Once you have an account on these sites, it’s an easy process to buy an NFT. Most marketplaces are in an auction format, so you’ll need to submit a bid for the NFT you want to purchase.

The thing you need to remember here is that you’ll still have to pay fees to make the transaction happen. Most digital marketplaces charge a “gas” fee for NFT sales. Gas prices may rise and fall depending on how busy the network is.

Listen now to hear about NFT: Non-Fungible Tokens Explained.