NFT is the hottest three-letter acronym around, and with all of the information associated with NFTs, cryptocurrencies, and blockchain technology, the amount of information can feel overwhelming if you’re thinking of investing. Not only that, but with so many NFTs for sale, it can be confusing as you attempt to discern which one is a good investment. This short guide will give you a brief overview of what NFTs are and why you should buy an NFT now.
What is an NFT?
For starters, an NFT, or a non-fungible token, is a digital asset that is listed on a digital marketplace, much like a real-world good such as a piece of art or a form of property. The “token” part of the non-fungible token is that an NFT is a piece of digital property that, at present, can only be bought and sold using cryptocurrencies or digital coins.
The non-fungible aspect of NFTs is probably more important in that it means that NFTs are unique pieces of digital property that cannot be replicated, nor are they equivalent to each other. Though it is possible for two NFTs to be valued at the same price, they are not equivalents and are each unique, non-replaceable digital assets.
Where to Buy NFTs
So, where can you go to buy an NFT? There are a number of marketplaces online that list and sell NFTs, and they vary in their structure and centralization governance. OpenSea, for example, is the biggest NFT marketplace that has relatively low listing fees (or lazy minting, as it’s called) and low transaction fees. As such, it’s a fairly accessible marketplace for artists and buyers of all investment tiers.
Other markets, such as those that are invitation-only, or collectible-based markets, tend to have higher pierced NFTs, less listed artists, and be less accessible to buyers on the lower end of the investment spectrum. Whether you’re looking to invest $100 or $100,000 in an NFT is up to you, but be sure to find the right marketplace for your investment.
Investing in Blockchain Technology
Blockchain technology is a really exciting way of rethinking how property ownership functions, particularly in the digital space. With so much skepticism about digital ownership, blockchain technology offers up an answer in the form of a publicly-shared, decentralized ledger of a coin or assets transaction history.
What this means is that if you purchase an NFT, when you purchased it, what you paid, and your current ownership gets marked on the NFTs ledger and becomes public record. This information is decentralized – not stored on one computer but made available across a network of computers– and cannot be retroactively changed unless it is peer-reviewed.
Blockchain technology allows for an expansive new field of technology, records, and ownership that doesn’t rely on a middle party to back secure transactions. The information is in the hands of the owners and marketplace users, which allows for more transparent processes and ownership across the entire process.
Why You Should Buy An NFT
Here’s the thing: buying an NFT should not be an impulsive decision. Like any investment, purchasing an NFT should be based on prudent decision-making in line with your investment and personal goals. Are you looking to connect with like-minded collectors? Want access to virtual and in-person experiences that might unfold into further investment opportunities? Then buying an NFT is your next big move.
Supporting artists and creators
First and foremost, buying an NFT is a great way of supporting artists and creators who are investing in the digital marketplace. With so many kinds of NFT projects listed, there’s something for everyone. With so many exciting projects that are connected to digital worlds, gaming universes, profile pictures for social media, and collectible markets, there is truly no limit to the capacity for NFTs to expand.
NFT Ownership is Backed by Blockchain Technology
Because of NFTs’ decentralized nature and the fact that NFTs are built on blockchain technology, they are transparent in their histories. Blockchain technology also provides safeguards against corruption since the ledger cannot be edited without verification from designated network participants.
NFT and Real-World Connections
NFTs aren’t just digital assets with digital impacts. So many NFT projects nowadays are connected to real-world events, access, and invitations that can only be acquired through the purchasing of the digital NFT. Perhaps you’re interested in meeting up with other NFT collectors in a city near you or across the globe; with certain NFT projects, you get VIP access to certain clubs by proxy of owning an NFT.
The Bottom Line
Like any investment, it’s crucial that you explore your options and conduct thorough research before purchasing an NFT. With digital marketplaces being relatively new and somewhat diffuse, it’s critical that you research before you invest and make sure that whichever NFT you purchase is aligned with your personal and investment goals.