If you have been apart of the crypto market for a while, then you probably already aware of the newest hottest trend for the past year – NFTs. In this post we are going to discuss the meaning of NFT, if you should spend time researching it, and top tips before investing!
Nothing should be considered investment or financial advice. Enjoy the ride!
Meaning Of NFT
What is an NFT?
A Non-fungible token (NFT) is a digital asset that contains identifying information recorded in smart contracts that are hosted on a blockchain.
This has multiple use cases that we can dive into, but lets dive into the name a bit more. What does Non-fungible mean?
What Does Non-fungible Mean
Non-fungible simply means that it is not replaceable. If you were to think about a specific item you own like your lucky socks or maybe an heirloom passed down from your ancestors – these would be considered (in a way) Non-fungible. They are not replaceable right?
Where as, if you just picked any pair of socks from Walmart, or if you picked a random item from a craft store you might be more willing to replace any of those items with any of the other ones of the shelf. These items are considered fungible.
So, when someone says Non-fungible token what should you think?
You should be think, something non replaceable in a token form. And that is exactly what it is! It is something that is stored in a token form that can not be duplicated or replaced. This can be all sorts of things like:
- Video clips
- Game characters
- Historical items
- Even other tokens
As you can see, a NFT can be just about anything that is represented on the blockchain that is irreplaceable and can be owned as a token.
Should You Research NFTs
If you are thinking about diving into this market, then you might want to first do some research.
Although if you are not aware, NFTs have been around for a little while. Single images are going for tens of millions, tweets like Jack Dorsey’s first tweet on Twitter are selling for millions, and common art can land you several hundred thousand dollars over night if marketed right.
Why wouldn’t you want to get a piece of that cake?
You might want to start with a simple course on Udemy, or maybe even a set of YouTube tutorials to get you accustomed to the NFT market. There are some important things you might want to learn before starting to purchase or create your first NFT.
Tips Before Investing
Lets go over some tips before diving into the NFT market that might help you in the long run.
Figure out how NFTs are priced and what they are going for:
You need to do your research about how much people are spending on NFTs and on what kinds of NFTs.
If you went to buy a mattress, and you offered $300, but they were selling for $100, you are going to lose a lot of money when you try to resell your mattress. Likewise, figure out a price range for certain types of NFTs before you even start moving crypto to purchase one. Here is a great article to read that will help with this.
Use A reputable Market Place:
This is very important since there are so many scams in the crypto space. You need to not only be patience, but be overly cautious when entering any new field of the market because you don’t know what you don’t know. People will take advantage of this. Because of that, it is a good idea to start with some of the top marketplaces before venturing out beyond.
Here are some you should start with:
- OpenSea – One of the largest NFT marketplaces around. Offers lots of different types of NFTs for sale
- Rarible – A community owned marketplace. Places a huge focus on art based NFTs
- SuperRare – Reputable marketplace that has a focus in selling unique NFTs
- AtomicMarket – Type of multiple website marketplace that offers plenty of verified tokens for purchase
- BakerySwap – Rare automatic market and DEX that on the Binance chain. Very simple and easy to use process for minting tokens
Have Fun With It
As I recommend with people entering the crypto market, it is best not to take NFTs too seriously.
While this might sound simple, it really is a gamble when messing with these things. There is not clear way to know for sure if an NFT will be worth something one day, or if the hype will die down. Therefore, make sure to enjoy the process, don’t invest more than you are willing to lose, and make sure to keep up with your assets and protect them.
Just to review for those that are new, here are the things to take away from this article.
- NFTs are Non-fungible tokens that are created with smart contracts that represent something based on the information provided and hosted on a blockchain
- There is no clear pricing structure for these assets, so any investing will be largely speculation
- Use the reputable marketplaces listed to get started and prevent scams
- Have fun learning about the hottest trend in the market!
Thanks for reading our post on the meaning of NFT! We hope this help you understand a new exciting part of the market.