NFTs, also know as non-fungible tokens, can digitally represent many types of assets. NFTs can represent real-world assets such as real estate and music, but can also represent online assets like digital art. NFTs are proof of ownership of these assets.
NFTs exist on a blockchain (distributed public ledger) that records transactions. Most NFTs are held on the Ethereum blockchain, but the Solana, Polygon and ADA blockchains are popular as well.
Allthough NFTs have been around since 2014, they are now gaining prominence as they are getting more and more popular to buy and sell digital artworks. The NFT market was worth a staggering $41 billion in 2021.
What is the difference between an NFT and a cryptocurrency?
NFT stands for non-fungible token. Generally, NFTs are built using the same kind of programming as cryptocurrency like Bitcoin or Ethereum. Cryptocurrencies are fungible, meaning they can be exchanged or traded for one another. Cryptocurrencies are also equal in value. One Ethereum is equal to another Ethereum. NFTs are different. Almost each NFT has its own metadata, making it impossible for NFTs to be exchanged for one another. NFTs often have utilities such as joining a community or getting rewards by staking an NFT.
The first NFT
On may 3rd, 2014, a digital artist named Kevin McCoy minted the first-know NFT, named Quantum. The NFT was minted on the Namecoin blockchain. Quantum is a digital image of a pixelated octagon that hypnotically changes color and pulsates in a manner reminiscent of an octopus.
How to buy an NFT
First of all, you will need to get a digital wallet like MetaMask. This wallet allows you to store NFTs and cryptocurrencies. In order to acquire an NFT, you will need to have enough crypto in your wallet to be able to pay for this NFT. Keep in mind that there is often a gas fee on top of the price of the NFT.
NFTs are often purchased through a minting dApp. Where you have a checkout at a clothing website to pay for your clothing, with NFTs you have a minting dApp. Most of the time you have to connect your wallet with the website to be able to buy an NFT. This allows you to buy one or more NFTs with crypto via the minting dApp. To make the process of buying NFTs more user-friendly, we have developed a system where the customer can buy the NFT with both crypto and local currency such as the Dollar or Euro. This makes your NFT more accessible to a larger number of customers!