How does an NFT work?
In this article we’re going we’re going to explain “what exactly is an NFT,” as well as chat with Blockchain Consultant Enzo Soyer (CEO of TENK, Co-founder of Fungible Strategy and Business Developer in CryptOracle). Enzo gives us a breakdown of all you need to know and more about NFTs.
Disclaimer: All content is for educational purposes. It is not financial advice
What is an NFT?
An NFT or Non Fungible Token is a digital token that represent ownership rights over items that cannot be easily replaced. These items may include collectibles, real estate, artwork, physical goods, games, software, etc. Unlike cryptocurrencies, NFTs do not have any intrinsic value; rather, they possess unique identifiers that allow them to be traded, exchanged, bought, sold, and transferred.
The purpose of NFTs is to make easier to trade these unique assets. For example, if someone owns a piece of art, and wants to sell it. The seller can use an NFT, so the buyer can verify (as in traditional art institutions) that the asset is legitimate by scanning its unique identifier (metadata).
As fungible token represents an asset that can be easily copied or duplicated, an NFT represents something that cannot be replicated or duplicated.
How do NFTs work?
NFTs work together with a Blockchain Network and behind the scenes, through an application or piece of software known as a Smart Contract, allows whoever buys or sells that NFT to change from one owner to another and split the royalties and funds automatically. We are going to explore more of this theme regarding the Smart contract in the future articles because it is one of the best features that NFTs have to offer.
How can an NFT be used?
An easy way to explain this is using a video game. Fortnite is a popular video game around the world played by both young folks and adults (including myself!). In this game you can buy skins and items to customize your character and game experience. All the assets or skins and items that you bought in the game store, are attached to your account and can not be transferred to anyone.
So, if these skins and items were an NFTs the player has the freedom to resell the items in the moment they want to. Doing this makes you the real owner of these digital assets because you have the freedom to resell it. Even game producers can still earn money from the royalties in secondary sales. Essentially, game studios and producers can even make additional revenue just by allowing users to resell their NFTs and create a new economy inside the game (of course this would also encourage people to play more to find potentially rare or valuable NFTs within the game).
Where can NFTs be purchased?
There are several ways to find interesting projects to look in. One of them is Twitter. You can dig into hashtags such as #DropYourNFT or even just simply #NFT, connecting you to collectors, communities and even artists from around the crypto world. It’s also a means to stay up-to-date with them and find potential new or promising collections to join in before they’re “hot.” Another and perhaps more straight forward way is to find projects is on marketplaces. If you are interested in projects launched on the NEAR protocol, https://paras.id/ or https://www.mintbase.io/ are the most popular marketplaces on the chain.
Now, if you want a more accurate and easy method to search for an NFT of your own you can try with the CryptOracle.io “launched projects dashboard” and check out new projects and trends. Take a look, it’s free. Link ? https://app.cryptoracle.io/collections-trends
Listen to the whole CryptOracle podcast with Enzo on Spotify here, where you can follow CryptOracle more content related to Blockchain and Web 3.0.
Here’s a quick preview:
