Beginners Guide to NFTs

NFT stands for non-fungible token. But before we go any further, you have to understand what fungible and non-fungible assets are. Money, oil, bonds, gold and bitcoins are fungible assets, meaning that they can be traded or exchanged. They are equal in value – $1 bill for your $1 bill. Meanwhile, non-fungible assets are different because they have a unique code and properties that aren't interchangeable and cannot be replaced with a different item of the same kind. It's like autographed memorabilia, a rare sports card, an antique car, or a rare old coin – it is non-fungible as they can't be easily replaced. NFTs are digital assets that represent real-world pieces or things like art, music, and videos. It has a blockchain-based signature that essentially turns the item into a one-of-a-kind digital token. This signature allows anyone to verify the artwork's authenticity and any transactions related to the artwork, including ownership, the person who sold it, and the time and cost of every transaction.

NFTs exist on the blockchain – a public digital ledger of transactions that records the provenance of a digital asset. Think of NFTs like real collector's items but in a digital format. An artist or creator can create an NFT by converting tangible or intangible items like music, digital art, videos, GIFs, and virtual avatars into crypto collections or digital assets and storing them on the blockchain. This process is called minting. If you mint an NFT, you're converting digital files into crypto collections and publishing your token on the blockchain for buyers to see. When people buy NFT, instead of getting a physical piece of artwork, the buyer gets a digital file and exclusive ownership rights.

NFTs are bought and sold via an NFT marketplace – like Rarible or OpenSea – think Etsy, but for digital assets. Here, NFTs can be stored, displayed, and traded.
Subscribe for Newsletter