NFT stands for non-fungible tokens, each one is unique, a digital asset and can’t be replaced with anything else. They have become popular recently. You may have heard of Nyan Cat gif sold using NFT or the founder of Twitter sold his autographed tweet as an NFT? Else, you are totally confused.
Well, today we’ll clear all your confusions about NFTs, what are nfts and how do they work, nft examples and nft in video games.
NFT can be like one of a trading card but non-fungible. Here to make it clear, Bitcoin (a cryptocurrency) is a fungible asset, you can trade it for another Bitcoin but not in the case of NFTs.
In this blog post, we will be explaining about NFTs, how they work and some examples.
Table of Contents
What is NFT? Some NFT examples
Non-fungible tokens (NFTs) are digital tokens unlike cryptocurrencies where you can exchange them for the same token/cryptocurrency, NFTs can’t be replaced. What surprises you more is that they are worth millions of dollars because of their uniqueness.
NFTs represent real-world items (digital in nature) like music, gifs, art, videos, etc. They are assigned cryptographically and anyone can seek ownership of digital items.
Do you know NFTs use the same blockchain technology which is also used in cryptocurrencies with a difference that they are not a cryptocurrency.
NFTs are highly speculative which is why they are not for every investor out there.
Some NFT examples.
1-Twitter CEO Jack Dorsey sold his first tweet worth of $2.9 million
2- Nyan cat gif is going up for auction in April 2022 as Nyan cat turns 10 (Chris Torres is the artist selling)
3-LeBron James 20 second video clip ‘Cosmic Dunk #29’ sold of $208,000
4-Beeple (a digital artist) sold ‘Everydays – the First 5000 Days’ of $69.3 million
IMPORTANT TIP FOR INVESTORS
High-priced NFTs attract scammers too, beware of them. Some may try to sell unauthentic NFTs and some may claim they own the right.
Scammers usually make copies of the original image/picture, video or nft video game assets and they don’t own the rights. However, there is a unique piece of art/ limited series as the original is of more value than the fake.
Why are NFTs popular and why is there a need?
Why are people spending millions of dollars on NFTs? An NFT is developed by the art form creator to keep the authenticity of the ownership, just about anything digital.
In order to clear further, take an example of Mona Lisa art. You may find thousands of replica copy in circulation but we all know there is one original. NFT helps in assigning the ownership of the original digital asset (could be art form, video game assets etc.)
How do NFTs work?
Ethereum network is the one where NFTs are generated and stored although there are other blockchain platforms too like Flow and Tezos but they are widely used at Ethereum.
The blockchain platform allows anyone to trace and verify who owns the right and token can remain pseudonymous.
What sort of digital goods can be ‘tokenized’ or categorized into NFT? Artwork in games, video clips, live broadcast, NFT marketplaces (like NBA TopShots) etc.
Also, if you are buying a limited-edition, you may not be given exclusive rights of the digital asset.
Difference between NFTs and cryptocurrency
NFT video games – a notable use case
In 2020, and 2021 even, only tech geeks were aware of the NFTs but as the video game industry is growing they are getting into the mainstream.
NFT is a niche market as many gaming industry giants think.
Some big names in the gaming industry are using NFT.
- Ubisoft Quartz where players acquire NFTs as ‘digits’ used as weapons and vehicles.
- Electronic Arts, Take-Two and Atari using NFTs.
- NFTs are collectible which is why they can be integrated into games.
- Axis Infinity (a game example) allows players ‘play to earn’ crypto where ordinary people are making profit from this technology.
Just like cryptocurrencies, you can buy, sell and create NFTs from online exchanges and marketplaces. The creator can choose the price or there could be an auction like for art pieces, you can bid for the NFTs.
NFTs are speculative assets, some make millions of dollars while others may end up spending a lot of money and not getting any worth for the NFTs they bought, sold or have created.