What are NFTs?

Did you know that Non-Fungible Tokens, also known as NFTs, are like bitcoins but with a twist? If you trade a bitcoin for another bitcoin, you’ll have exactly the same thing. That’s what makes a bitcoin fungible. However, tokens that are not fungible like NFTs, is a one-of-a-kind trading card. Why? Because the term “non-fungible”, means that if you trade it with another card, you’ll have a completely different one.

A large part of NFTs is part of the Ethereum blockchain- which is a cryptocurrency. Now how do they differ from each other? Well, non-fungible tokens are generally built with same kind of programming as cryptocurrency. But, just like bitcoins, cryptocurrency is fungible and can be traded for the same thing.

Cryptocurrency’s fungibility makes it a trusted medium for transactions in the blockchain, which means that NFTs are bought and sold online, frequently thru the use of cryptocurrencies. How is this possible? Perhaps, you’ll need a digital wallet first that can be able to store NFTs and cryptocurrencies, and then purchase some crypto. You’ll then be able to move it from the exchange to your wallet of choice.

And how does this tokens work? Non-Fungible tokens give artists and content creators a unique opportunity to monetize their wares. It is like a physical collector’s item, but only digital. Artists can now sell their works directly to the consumer as NFTs, instead of conducting auctions and relying on galleries in selling. So rather than acquiring an actual painting, the buyer gets a digital file instead. In addition, NFTs value exclusivity the most. Its unique data makes it easy to verify their ownership and transfer tokens between owners, therefore having only one owner at a time.

Enjoy this video about NFTs by EarthPen.

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