What is NFT?
Knowledge

What is NFT?

The NFT market is growing explosively. In January 2021 alone, the transaction volume of NFTs reached a high of 200 million US dollars, compared with 250 million US dollars for the whole year of 2020.
Published: Jan 17, 2022
What is NFT?

What is NFT?

The full name of NFT is Non-Fungible Token. The tokens issued according to the Ethereum ERC721 standard have the characteristics of indivisible, irreplaceable, and unique. The ownership and authenticity can be verified either as a representation of a fully virtualized asset or as a tokenized form of a real asset.

NFT is actually like a set of digital ID cards. In the past, it was difficult to distinguish the authenticity of digital assets, and it was difficult to prove ownership. NFT introduced the function of identifying ownership through a unique ID card. For example, buying a house requires a deed to prove the ownership of the house, and NFT is such a certificate.

Taking works of music as an example, NFT uses blockchain technology (such as the ERC-721 standard of the Ethereum network) to mark the music works with a unique and immutable digital identification code, and store them on the blockchain to ensure the works. The scarcity and collectability of the asset can be confirmed to satisfy the collection psychology of fans.

Since the explosive growth of NFT in 2021, different applications have been introduced, which can bring special experiences, exchange feedback, or convey an exclusive sense of community. In addition, NFT also has a secondary trading market. NFTs can be re-purchased with a relatively high chance of bringing high rewards.

Where to buy NFTs?

Among the current well-known NFT trading platforms, the market with the largest trading volume in the world is OpenSea. Art Blocks is famous for its professional artworks and strict curation, and Taiwan also has an active NFT auction venue.

Before officially going to an NFT trading platform to buy collectibles, investors should first go to the wallet website MetaMask, or the wallet site Blocto, created by the Taiwanese team, etc., create a wallet, and go to the cryptocurrency exchange to buy some coins. Currently, all exchanges that support Taiwan dollar deposits are ACE, Max, BitoPro. It is equivalent to going to an art gallery to buy paintings, you must first have a wallet account of virtual currency, and you have to buy virtual currency and put it in your wallet before you can start buying collections. As NFT transactions attract more and more attention, more friendly NFT platforms are also launched. The purchase process is almost the same as that of general e-commerce. Just click the NFT you like to add to the shopping cart, transfer money directly with Taiwan dollars, and swipe your credit card to purchase directly.

Will buying NFTs make money?

How to choose NFTs? Investors can check the artist's worth. As long as they have sent NFT, their past works, the transaction price of the project, the number and price of resale, and the frequency of second-hand transactions are all public data. Investors can judge a reasonable price range and timing.

The brand-new project lacks transaction history, making it difficult to judge whether it is true or false, but just like digging raw ore, it is also the easiest to earn super-high rewards. Many NFT issuers are well-known creators or celebrities in the real world. If there is a certain reputation in the real world, it will also help NFT issuance. In addition, NFT investors can click on the project and the creator's Twitter page, observe the number of followers, the degree of discussion, and whether there are celebrities in the circle buying, and find their precious raw ore through these methods.

Where can I find NFT related information?

In the NFT world where new projects are born every second, knowledge is power, and information is a bargaining chip. Many newly listed NFT projects will adopt a whitelist system. The so-called whitelist system means that investors can register their wallet addresses with the project party before NFTs are put on sale. They can be regarded as the first batch of loyal supporters. Usually, these people can buy NFTs at a lower price.

For first-hand information, your best bet is to follow well-known NFT projects, your favorite artists, or join discussion groups on Twitter. If you want to observe the most recent projects, collectors can go to relevant websites to browse the most popular NFTs and related cryptocurrencies with the highest market value.

How to assess the risk of NFT investment?

NFT collectors may indeed increase by a dozen times through a digital collection, but in fact, up to 73% of NFTs cannot be resold. From an investment perspective, they are very high-risk and high-reward investment products.

Benefits of NFT issuance:

  1. Good tracking:
    Because the data is recorded on the blockchain, everyone can inquire about the source of the NFT, the number of issuances, the transfer record, and whether it has been verified by a third-party unit.
  2. Prevent forgery:
    In the Internet age, video and music creations do not have the concept of originals or genuine works. Due to the convenience of copying, these creations lack rarity and value and are also threatened by piracy and infringement. The function of NFT is like a digital stamp, ensuring that the virtual products purchased by consumers on the Internet are genuine, and maintaining the scarcity and collection value of the products.
  3. High liquidity:
    Assuming that the copyright of a song is purchased today, it will not be impossible to continue to use the music due to factors such as the failure of the record company. NFTs can be traded in any auction house. In addition to the purchaser's real right to use, it is also easy to sell in the future.
  4. Real and virtual integration of assets:
    NFTs are like a bridge between the real and virtual worlds. For example, many people like to hide red wine, they can record data through IoT devices in all the processes of grape harvesting, brewing, preservation, and trading of a bottle of red wine, and combine it into NFT and red wine. In this way, when buying red wine in the future, you can view the resume of the bottle of red wine in NFT format through the NFC chip inside the cork; collectors can also directly use the NFT format to trade red wine.
Published: Jan 17, 2022 Source :cw

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