What does the term “NFT” mean?

The term “NFT” is being mentioned more and more often in the digital world. These are digital collectibles that reach extremely high prices. But time and time again, dissenting voices warn of suspected fraud over the NFTs.

NFT

We explain what the abbreviation NFT stands for, what is special about NFTs, what opportunities and risks there are with NFTs, and where you can buy NFTs.

What does the abbreviation NFT mean?

NFT is an abbreviation for Non-fungible Token. This describes digital tokens that are not fungible. Non-fungible means that the digital good cannot be reproduced. NFTs are unique and therefore cannot be duplicated. They are therefore unique, non-copyable digital objects.

NFT

NFTs are based on blockchain. Thanks to blockchain, these NFTs are counterfeit-proof and reach extremely high prices due to their unique nature. Unlike other blockchain-based commodities such as Bitcoin, NFTs have a unique digital signature. One bitcoin is the same as another bitcoin. In total, 21 million bitcoins can be created, all of which have the same value.

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NFTs each have their unique value. This allows an NFT to reach an extremely high price while each of the bitcoins has the same value. The blockchains on which the NFTs are based are blockchains that offer smart contracts and can therefore be the basis for decentralized applications. The main blockchains in NFTs are Ethereum and Solana.

How do NFTs work?

An NFT is dependent on the blockchain that contains the information about the NFT. Each block in the blockchain is equipped with information about the previous block. As a result, the blockchain has the “digital fingerprint” of the digital asset. This uniqueness can lead to the accurate identification of each digital asset.

An NFT can assume the different forms of all digital goods. But especially digital artworks have emerged as NFTs in recent months. These digital works of art received extremely high pricesas they are unique and created a lot of hype through digital auctions and achieved these high prices.

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When you buy an NFT, you get exclusive access to NFT’s blockchains. As a result, the ownership of NFT is coldly defined, and theft of the artwork is in principle ruled out.

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How is NFT pronounced?

The pronunciation of NFT mostly involves the individual letters, which are pronounced separately. ONEThis is how you say “Than-eff-tee”. Other forms of pronunciation include the pronunciation “neft” or “naft”. However, these forms are much rarer, and the pronunciation of the individual letters guarantees that the one who hears the expression knows what is meant.

What are the opportunities and risks of NFTs?

As unique digital works of art, the NFTs offer extremely high possibilities for several areas of the digital world. The NFTs, for example, have revolutionized the art market and brought a whole new form of online art trade to the world.

But NFTs have also had a massive impact in other areas such as the music world or gaming. In the future, NFTs should find more and more applications and push even further into the mainstream.

NFTs Mona Lisa

NFTs offer the following options:

  • NFTs are unique and can therefore generate high prices. Thus, artists have the opportunity to earn a living with just a few works.
  • When trading on NFT exchanges, artists always receive a certain percentage at the selling price. That way, the artists make money with each change of ownership.
  • The art market has become spacious, as anyone with Internet access can purchase such a work of art through digital auctions. This leads to more interest in art in general.
  • that Possibility of customization of works of art, music and co. is limitless. This gives artists more design options and control.
  • The bond between artist and buyer / consumer becomes stronger. Blockchain offers a more direct communication between both parties.

However, the NFTs also have certain limitations riskswhich we would also like to list here:

  • In the past, it happened again and again with NFTs fraud. As this is a new technology that is now making its way into the mainstream, it attracts free riders who want to monetize scams via NFTs.
  • The NFTs experienced massive hype. As a result, NFTs of many cartoon characters achieved huge awards. This in itself is not a problem. However, it can cause some projects to get too much hype and the “true” value of a work of art is no longer reasonably represented.
  • There is a risk that large platforms such as OpenSea will gain too much control over the market.

Where can I buy an NFT?

An NFT can be purchased on various platforms. First of all, we need to name the major NFT platforms.

Dthe largest and most important NFT platform is OpenSea. Here you can choose your NFTs from hundreds of NFT collections and buy an NFT at different prices. You can buy an NFT directly or participate in an auction.

CLICK HERE TO BUY AN NFT ON OPENSEA!

Another famous platform is Rarible, which even precedes OpenSea and also offers a massive selection of NFTs. But OpenSea has previously surpassed Rarible in popularity.

These platforms offer NFTs based on the Ethereum blockchain. However, the Solana blockchain also plays an important role. We have summarized the Solana NFT platforms in this article.

Another platform where you can buy an NFT is the world’s largest crypto exchange, Binance. Binance offers a centralized marketplace for NFTs, which can have pros and cons.

You can find all the information on how to buy an NFT on Binance in our article on the subject here.

CLICK HERE TO BUY AN NFT ON BINANCE!

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