- September 30, 2022
NFT has gained a lot of popularity recently, and we think that everyone should have at least heard of it. The number of well-known individuals and brand companies who participate in the NFT market is growing, and even the frequency of news is increasing. But what precisely is NFT, and upon what tenets and foundations is it built? What magic or qualities does NFT possess that enable brands and celebrities to enter this market? The TCG White Label Editorial Staff will guide you through the NFT today.
What is NFT?
The non-fungible token, or NFT (Non-Fungible Token), also known as a "non-homogeneous token" in Chinese, is a special digital asset whose ownership is traded and tracked on the blockchain.
This new file format can be traded with each other through the transmission of tokens, with anti-counterfeiting benefits, security assurance, and ownership is also assured. NFT is a token created on the blockchain; each token has a fixed quantity. Because the source of digital archives can be examined right away, NFTs are a new "file format" that creates a new economic ecology. They can monitor ownership as well as verify that the archives are originals. When an NFT is paired with a digital file, it is simple to verify that the file is an original by looking for the owner of the file using a fixed number.
NFTs are a type of virtual asset that can be replicated using blockchain technology, but they can also be used to identify ownership through encryption. When combined with timestamp protection and data that captures product details (metadata), they can become a unique digital asset in the world.
Why Are NFT’s So Popular?
The 2017 blockchain game "Crypto Kitties" is an application of NFTs, however at the time, very few individuals in the currency circle were interested, there were no well-known companies and celebrities to invest in, and it did not generate much media attention. Christies hosted an auction of "digital artworks" till March 11, 2021, including digital artist Beeple's "Everyday: The first 5000 days" was sold as a non-homogeneous token (NHT) and eventually sold for a high price of $69 million, becoming the most expensive NHT artwork in history. In the same month, Twitter founder Jack Dorsey sold his first post on Twitter as an NHT and sold it for $2.91 million at the time, two news that garnered significant attention in the crypto asset market.
The NBA Top Shot website allows fans to purchase their favorite player's wonderful game screen moments in addition to digital artwork. The current NBA Top Shot total sales have exceeded 11 million, with LeBron James' 24-second dunk video being the most well-known sale, fetching $208,000. This deal also ignited the NFT boom.
Currently, NFTs are primarily used to encrypt artwork, online gaming props, event tickets, NBA Top Shots of NBA player cards, images, music, or videos. In other words, nearly anything in the internet world may be NFT, and then it can be auctioned, exchanged, or collected.
The Risk of Collecting NFT’s?
Even if NFTs offer distinct and irreplaceable qualities, their growing popularity can't help but cast some doubt on them. Some individuals view NFTs as works of art or collectibles, and others purchase NFTs with an eye toward speculation. The price of NFTs, like other virtual assets, can be extremely volatile, and it can be challenging to estimate their true value because of the risk associated with trading platforms, liquidity, digital wallets, cross-border transactions, and lack of supervision. Some individuals doubt that this is a game of speculation for investors and do not truly value digital art, while others believe that some NFTs are being sold for far more than they should be.
NFT transactions are made through the bitcoin market, but otherwise, this behavior looks to be the same as that of other online market transactions. But investing in NFTs is basically similar to gambling because no one can predict the future direction of the NFT market, whether an NFT that is purchased can genuinely have a value preservation impact, or whether the present holding of NFTs will increase in value over time. The majority of investors in NFTs attempt to secure a position in the NFT market because they believe that the market's growth rate will only continue to accelerate and that its potential for appreciation is limitless. Regardless of whether the NFT is a publicity stunt or a genuine breakthrough with market value, it is still important to keep an eye on it. We invite you to discuss and impart further perspectives on NFTs.