You have probably heard something about NFT, haven’t you? Such tokens enjoy enormous demand and fuss today. Yet, many traders have only a vague idea of how they work and refrain from investing. That approach can hardly be called wise. Instead, we offer you to learn the basics of these exclusive tokens from our guide.
The first point is to understand what NFT is. It is interpreted as a non-fungible token. Its distinctive feature is that it is used to encrypt unique information, for example, an exclusive photo or painting. And that means that there are no two identical NFTs. Consequently, they are not interchangeable. In other words, you cannot sell them and buy them back like Bitcoin or Ether. They are not meant for conventional trading. Instead, investors buy them to obtain the right for a piece of art, music, image, gaming tools, domain names, real estate, etc. In practice, any intellectual or physical object can be transformed into a unique token.
As for the value of such assets, it can reach unbelievable heights. For example, Jack Dorsey, who is the CEO of Twitter, has managed to sell his first tweet encrypted in an NFT for about $3 million. Obviously, investors buy such assets expecting them to dramatically grow in price over some time. It is usually a long-term investment.
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Where to buy NFT tokens? They are not sold via usual cryptocurrency exchanges. Instead, you must find a specialized online marketplace. Such platforms work similarly to Amazon. You can buy an NFT selected just by pressing the “Buy” button and making the corresponding payment. But some of them are sold via auction procedures. Then, you will have to make the highest bet to obtain an asset chosen. Another important detail ― payments are usually accepted in cryptocurrency: Ethereum, Bitcoin, and others.
Now, to make your choice easier, we have determined the top 10 NFT marketplaces for you: Binance NFT, OpenSea, Alibaba NFT, Axie Infinity, SuperRare, Rarible, Foundation, Nifty Gateway, KnownOrigin, Sorare.
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But, where to store NFTs after a purchase? There are two options: you can either keep your assets in your account on the same marketplace or transfer them to your crypto wallet (depending on the technology used for creating the NFT).
To sum up, an NFT is a great object for long-term investments. Yet, like with other collectibles, there is a risk that the asset bought will drop in price. Thus, stayaware.