If you’re an entrepreneur, always on the lookout for the next frontier in capital investment, you will have heard about NFTs. Not only are they making the world of crypto trading much more interesting, some people go so far as to argue that they are going to redefine modern financial systems.
As popular as NFTs have become in the last year or two, there is still plenty of confusion around what they are and how they work, not to mention how anyone could rationalise paying $6.6 million USD for a ten second video. In this blog, we’ll look at what NFTs are, what makes them valuable, and how you can start buying and trading them.
What Are NFTs?
NFT stands for non-fungible token. In finances, “fungible” means “replaceable by another identical item; mutually interchangeable.” Fiat currencies like the US dollar are fungible, because there is nothing distinguishing one dollar for another – they all have the same value, which means they can be readily traded and exchanged. The same is true of cryptocurrencies like Ethereum and Bitcoin.
An NFT is a digital asset, generally an artwork like a drawing, video, or piece of music, with a unique identifying code that is built into it and makes it non-fungible. You could create a copy of that artwork that would be indistinguishable from the original, but without that code, which acts like an artist’s signature to give the item authenticity and rarity, it wouldn’t be worth anything. Just like paintings or sculptures in the non-virtual world, NFTs have commanded eye-watering figures reaching well into the millions. And just like real-world art collectors, savvy and discerning NFT collectors stand to make a hefty sum.
Where Can I Buy or Sell NFTs?
There are many online marketplaces where you can buy or sell NFTs, mostly on the Ethereum blockchain. You can also find plenty of NFT marketplaces outside of Ethereum, such as OpenSea, Mintable, Cosmos and Polkadot. All of these platforms operate differently and have different kinds of NFTs, so it’ll take some exploring to find out which ones are most interesting to you.
What Do I Need to Buy NFTs?
In order to buy or bid on NFTs, the first thing you will need is a stash of cryptocurrency. Most NFTs are Ethereum based tokens, so having a good stock or Ethereum is going to give you the greatest variety of choice. However, this is not the only blockchain people are using to make NFTs, so it’s a good idea to diversify. You will also need a crypto wallet that you will connect to the platform. Your crypto wallet is an essential part of the blockchain system; it is used to access platforms, sign transactions, and use the various blockchain services. With just these elements, you can be on your way.
Want to Find Out More About NFT? Contact Think10
At Think10 Capital, we’re committed to providing ambitious entrepreneurs with forward-thinking investment opportunities. Get in touch today to find out how to make NFT trading work for you.