NFT 101

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What is NFT?

In cryptocurrency, NFT is an abbreviation for a non-fungible token, which essentially means that it is a digital asset that belongs to you and you alone, rather than to anybody else. The most popular NFTs right now contain artwork and music, but they can even include movies and even tweets, which are becoming increasingly popular.

 

Difference between NFT and Cryptocurrency?

NFT is an abbreviation for non-fungible token. Generally speaking, it is developed using the same type of software as cryptocurrencies, such as Bitcoin and Ethereum, and that is about where the similarities between them end.

To give an example, physical currency and cryptocurrencies are both ‘fungible’, which means that they can be traded or exchanged. Not only that, but they also hold the same value. For example, 1 ringgit will be 1 ringgit, just like how 1 bitcoin will be another bitcoin and such. Because of crypto’s fungibility, it is a transaction method where it is reliable on the blockchain.

 

How to buy NFT?

Before you can actually buy your own NFT, you will need to acquire a digital wallet that allows you to keep NFTs and cryptocurrencies. Most likely you need to purchase some cryptocurrency (depending on your NFT provider), to purchase the NFTs. You can actually buy it using your credit card on platforms like Paypal, Robinhood and eToro. When researching your alternatives, keep in mind that there are fees to consider. When you acquire cryptocurrency, the majority of exchanges charge you at least a portion of your transaction.

 

Additional note, some of the popular marketplace that you can buy NFTs are:

  • OpenSea.io
  • Rarible
  • Foundation

 

How to make money with NFT?

Just like cryptocurrencies, you can buy and sell them. The only hassle is the minting process. The tricky part when it comes to trading NFTs is when you sell them. How rare is the rarity of the item? Is there anything fascinating about the item? In order to find out, you can do quick research on the internet like the marketplace or cryptocurrency news today to find out.

You’ll also need to account for price growth or decline. Include other expenditures such as petrol, listing fees, and royalties paid to the original purchaser when calculating your possible profit and loss. These costs will eat into your take-home pay in the long run.

Should you buy NFTs?

Investing in NFTs is risky and the future is still uncertain. It is completely down to your personal decision to invest in NFTs. If you have extra money to splash on, by all means, go ahead. However, do keep in mind that the value of NFTs are based on how much someone is willing to pay for them. In such a case, the influence of the price is by demand rather than economic indicators. Something which stock prices do.

In a nutshell..

Despite the fact that selling NFTs appears to be simple, it isn’t always as simple as it appears.

Hope this article was a good read.

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