We're going to explain what NFTs are and how they work , so you can understand what's behind the news about people making incredible returns by investing in NFTs.
For this reason, we are going to try to stay away from technicalities and share with you the selection of the best free tutorials that make the explanation as simple as possible and that we have selected for you.
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WHAT IS AN NFT
NFT stands for non-fungible token, a non-fungible token. Tokens are units of value associated with a business model such as cryptocurrencies. And the fact is that NFTs, at least technologically, have a close relationship with cryptocurrencies, although they are opposites, since Bitcoin is a fungible commodity and NFTs are a non-fungible commodity, but at their core they are like two sides of a technological coin.
For your understanding, we can think of cryptocurrencies as a store of value, similar to gold. You can buy and sell gold, and when the number of buyers increases, the price goes up, and when the number of buyers decreases, the price goes down. This behavior is similar to cryptocurrencies.
But gold is gold, after all, and you can easily trade one nugget for another. However, there are other assets made of gold that also have value but are unique, and that fact matters and gives them a different kind of value. Much like the value of gold or a piece of art, NFTs are unique assets that cannot be traded or exchanged for others of equal value, as no two NFTs are the same to the same extent as two paintings.
Source: YouTube/@Fazt
How do NFTs work?
NFTs work through blockchain technology. It is the same technology as cryptocurrencies, working through a decentralized computer network with blocks or nodes connected and secured with cryptography. Each block is associated with the previous block, date and transaction data, and is inherently resistant to data changes.
An NFT is known as a type of digital certificate of authenticity, a set of metadata that cannot be altered. This metadata guarantees its authenticity, establishes the cost of acquisition and any purchases or transactions made, as well as its author.
This means that when you buy digital content with NFT tokens, there is always a record of the first value and how much you bought. It's like buying a painting and seeing where it goes.
In general, most tokens or NFTs are based on the standards of the Ethereum network and its blockchain. Thanks to the use of well-known and popular technology, they can be easily exchanged for buying and selling with certain wallets that also work with Ethereum. However, we are talking about unique works, so there is no active buying and selling as there is with digital currencies.
HOW TO BUY AN NFT
Source: YouTube/@ Alejandro Salomon - Entrepreneur
SUMMARY
NFT stands for Non-Fungible Token. Tokens are units of value that are assigned to a business model, such as cryptocurrencies.
And the fact is that NFTs have a close relationship with cryptocurrencies, at least technologically, although they are opposites, since a Bitcoin is a fungible good, and an NFT is a non-fungible good, but in essence, they are like two sides of a technological coin.
To explain this better, we can think of cryptocurrencies as a store of value, something similar to gold . You can buy and sell gold, and when the number of buyers increases, the price goes up, and goes down when the number of buyers decreases. It is a behavior similar to that of cryptocurrencies.
But gold is gold in the end, and you can exchange one gold bar for another without any problem. However, there are other goods made of gold that also have a value, but they are unique, and that fact makes the difference and gives them another type of value. Like that value made with gold or a work of art, NFTs are unique assets that cannot be modified or exchanged for another that has the same value , since there are no two NFTs that are equivalent, just as there are no two paintings that are.
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