fbpx

WHAT ARE NFTs?

NFTs prove ownership of a unique digital asset like art, music, collectibles, videos or anything else with blockchain technology.

NFT stands for non-fungible token. That sounds like an intimidating technical term (no more nerd talk, promise!). But NFTs are just digital certificates of authenticity.

If you buy a physical painting, you know it’s real because you see the artist’s signature on the canvas. Somebody can photocopy the painting, but they don’t own it — you do. Before NFTs, digital assets were like photocopies:

You can see who posted something, but you can’t see who owns an Instagram post, Pinterest Pin or Reddit meme.

NFTs are like a signature for digital items: They authenticate ownership of digital assets like art, collectibles, music, videos, in-game assets, and more. Just like physical certificates, they document:

  • Who created it
  • When it was created
  • Who bought it (and when)
  • The price(s) it solds for
  • Who owns it now

(Technically, NFTs can contain any data the creator wants to include, but the above are most relevant.)

All of this is public via a blockchain, so anyone can trace each of your NFTs from the original creator all the way to your wallet—and verify its authenticity but owning digital assets is more than “nice to have”, a fun hobby or a digital stamp collection:

Some NFTs unlock digital (or physical) experiences, grant access to exclusive communities, let you contribute to projects, grant premium access to software products… We could keep listing awesome features, but that list would be endless and our writer needs to get this done before tomorrow’s meeting. Tbh, this technology is so new, we probably haven’t even seen 4.20% of the use cases.

WHAT IS A BLOCKCHAIN?

A blockchain is a network of computers that track transactions in their network and generate a giant ledger of who owns what (and how much of it). That’s a lot of beep boop action!

So if you ignore your friends’ well-meaning advice and spend six figures on a CryptoPunk, computers around the world confirm you as the NFTs new owner—and ensure it stays in your wallet.

Blockchains that host NFTs include:

  • Flow
  • Tezos
  • Polygon
  • Ethereum
  • Solana

…and many more

Rarible currently enables selling and buying digital assets on the Ethereum and Flow blockchains, with more to come..

WHERE CAN I BUY, SELL AND TRADE NFTs?

It all depends on what you want to do or what area you are best at, for example if your thing is collectible sports cards, then NBA Top Shot is the best place to buy, sell or trade your NFTs.

If what you like is art, either because you are a creative genius or because you know how to make money buying and selling art, then Rarible is the place where you should be since it is one of the most well-known platforms for emerging artists and transaction costs are relatively low compared to other platforms. For more advanced art related NFTs check out OpenSea.

For those users who are a little more adventurous and ambitious, there are virtual games where you earn as you play… yes, just as you are reading it… they pay you to play… A clear example of this is Axie Infinity, in which after an initial investment you can use your Axies to compete in virtual battles and you can start earning SLP (small Love potion) which are the tokens that the platform uses which can be converted into USD if you wish.

Now, if you are old school and you’re like cold hard “cash” there is a new trend where people are starting to tokenize real world assets, the best example of this is TechCrunch founder Michael Arrington who sold his apartment in Kyiv, Ukraine, as an NFT back in June 2021.

The message here is that the possibilities are endless, there are an array of ways to use NFTs that are yet to be discovered, it is simply a matter of time before someone comes up with a creative way of tokenizing other real world assets and make use of them through DeFi. 

TALKING ABOUT DEFIS…

You might be searching the web trying to figure out “What is Defi?”. Well, defi (or decentralized finance) covers 5 main pillars:

1) Stablecoins

2) Lending and Borrowing

3) Decentralized Exchanges

4) Insurance

5) Margin Trading

All of these services are provided securely through the use of 3 technologies, Cryptography, BlockChain and Smart Contracts, if you don’t know what these are stay tuned as we will talk more about it in following articles, in the meantime you can check out our blog at Dataoptin.com

By Diana Gonzalez

Open chat
Hello!
Can we help you?