NFTs: An Overview

Tarun Ramakrishnan

April 29, 2022

Non Fungible Tokens(NFTs) have gained popularity in recent times, but what are they? Let’s start by taking a closer look at the name, Non-fungible token. When something is fungible, it means that it can be replaced. For example, bitcoin is fungible as you can trade your bitcoin for another. NFTs, on the other hand, are not. Picture this, the original painting of the Mona Lisa is being auctioned off by the Louvre Museum. A man named Bob wins the painting with a bid of 950 million dollars. He is now the official owner of the Mona Lisa. Nobody can trade Bob for another version as he currently owns the only “official” copy. NFTs are just like famous paintings in the sense that when someone creates an NFT, they can sell it to others using Ethereum, a form of cryptocurrency. In addition, whenever the NFT is sold, creators will benefit and will gain profits for every sale of the NFT, however, the NFT is no longer in their possession. 

Upon knowing about what NFTs are and how they work, you might wonder about how people can use them? Social media creators can benefit from NFTs more than anyone else. Painters can create paintings to be sold as NFTs instead of storing them in museums or keeping them for display. If the painting is priced fairly and is popular, there is a good chance that people will want to buy the NFT, creating profits for the original creator. In addition to posting their newest albums to popular music streaming platforms, musicians can create albums and sell tickets to their concerts through NFTs

Now we know how creators can benefit from converting their media into NFT formats and selling them for cryptocurrency. However, there's a good chance that if you're reading this article, you aren't a creator and want to get involved in NFTs. The simplest way to go about doing this is by investing in NFTs. In order to do so, you have to set up a cryptocurrency wallet, preferably with Ethereum as it is the most commonly used currency for buying NFTs. While you might not be able to buy the best NFTs on the market such as the Bored Ape, there is a high chance that you can still make money by purchasing NFTs within your budget and selling them at a profit.