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5 Things You Should Know About NFTs

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The bubble called NFT is slowly emerging from the digital world.

Firstly, what does NFT stand for?

NFT stands for non-fungible token.

That might not have been of much help, so let’s first define what fungible means.

Fungible items are things that can be substituted or exchanged and will still hold the same total value. These come in the form of money, gold, and casino chips, among others. For example, if you let someone borrow $10, they’ll return $10 to you.

A non-fungible item is an asset that can’t be substituted. A perfect example for this would be a painting. Leonardo da Vinci’s Mona Lisa can be replicated (and there are plenty of replicas out there), but there is only one definitive actual version made by the artist. Another example of an NFT is the gnome series.

Tokens are digital certificates stored inside a secure, distributed database called a blockchain. Some NFTs are physical and tangible (paintings), while others are digital and intangible (game skins and digital art).

So, Why Do NFTs Have Value?

The answer is simple. It’s because of the rare nature and unique quality of NFTs.

If you’re still skeptical about the value of NFTs or if this got you excited to become an NFT aficionado, here are a few things you should know:

1.    They Are Verifiable

Each NFT contains distinguishing information that makes it both distinct from any other NFT and easily verifiable without the use of third-party applications. This makes the creation and circulation of fake collectibles pointless because each item can be traced back to the original issuer.

2.    They Are Indivisible

The NFTs cannot be broken down into smaller compositions or divided into denominations. They exist exclusively as a whole item.

3.    They Are Indestructible

NFTs are stored in the blockchain via smart contracts, which means that they cannot be destroyed, removed, or replicated, as each block in the blockchain has a unique hash that, when altered, makes another block instead of configuring over the old one.

4.    They Are Non-Interoperable

The NFTs can only be used in their own world. To better explain this concept, let’s think of cards. You are not able to use a Pokémon card in a game of poker even though they’re both cards. It’s the same concept with NFTs.

5.    They Revolutionized the Gaming and Collectible Space

Avid gamers can now become the immutable owners of in-game assets and other unique items as well as make money off of them by selling them. Now that you have a basic overview of what NFTs are, it’s up to you whether or not you are willing to take a risk by building your digital assets with these items. They are still inside the bubble, and there is no telling when this bubble will actually burst.

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