If you have been paying attention to KALA social channels or the crypto market as a whole you surely have seen the term NFT being used here and there or everywhere. A lot of people are saying NFT is the next big thing. So what is “NFT” and what’s the hype all about? Let’s find out together!
What is “NFT”?
NFT stands for non-fungible token. A non-fungible token is a financial security consisting of digital data stored in a blockchain, a form of distributed ledger. The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. Basically speaking, It’s a token built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum.
NFTs can be anything digital (such as drawings, music, videos,…) but the most popular form of NFT right now is digital art. Examples include Bored Ape Yacht Club, CryptoPunks NFT, and KALA Pen NFT collection.
So what is the difference between NFT and Cryptocurrency?
The difference is that physical money and cryptocurrencies are “fungible”, meaning they can be traded or exchanged for one another. They’re also equal in value (1 bitcoin is always worth equal to another bitcoin). This fungibility is why cryptocurrencies are a trusted means of conducting transactions on the blockchain.
NFTs are “non-fungible”, you can see them like trading cards. Trade one card for another and you have something completely different in form and value.
What is the point of NFT?
Let’s take digital art as an example. If you’re an artist and want to sell your arts before you would need to rely on galleries or auction houses to sell. Now you can just sell your art directly to buyers as an NFT. You get to keep more profits to yourself, you can even program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. This is an attractive feature as artists generally do not receive future proceeds after their art is first sold.
The same thing applies to all kinds of digital property. With NFT you no longer have to take a cut for a 3rd party in order to monetize your content.
Should I get into NFT?
Now that we have an idea about NFT and its application, should you jump on the hype train? The answer is it depends. As mentioned, NFT is “non-fungible” and its worth may go for less than what you paid for overtime.
All in all, NFT is new and its future is uncertain. Your best bet is to treat NFT like you treat any type of investment. Make sure to do your research, and understand the risks before you decide to spend your hard-earned money. Of course, if you want to support a creator or you just want to collect for fun. Feel free to grab some.
Where can I buy NFT?
You can buy NFT on NFT marketplaces. The most popular ones are OpenSea.io, Rarible, and Foundation. A lot of NFT collections also have their own marketplace, so if you have one in mind you can look them up and purchase directly from their marketplace.
However you see NFTs, they’re definitely the big talk of the town. Their application on digital assets makes them much easier to get into and they’re likely to be the gateway for many users as their first venture into the world of blockchain. Ultimately, it’s up to you to decide whether you want to get into NFTs with the information we provide. Whether you’re in for the fun or for profits we wish you the best of luck!