[TRENDING] NFTs explained!

By sourjyadipta | November 4, 2021

Here’s a basic guide for you to understand what NFTs are, how they work and if they’re good for investments.

BB profitable

To begin with, here’s a buzzword to keep you interested for the next few minutes: Blockchain.

Blockchain technology has risen to prominence in recent years. Cryptocurrency has quickly become one of the most sought-after investment vehicles. Millions of investors are betting their money on new-age currencies ranging from Bitcoin to Shiba Inu.

As governments and regulatory bodies gradually accept these currencies, a whole new dimension is being added to the system.

Say hello to NFTs. NFT is an abbreviation for Non-Fungible Token. And this piece will help you understand the concept better. The word fungible, according to the Oxford dictionary, means “replaceable by another identical item; mutually interchangeable.” As a result, a non-fungible token is one that is one-of-a-kind and cannot be replaced.

Why are NFTs in the news? 

This week saw the release of Amitabh Bachchan’s ‘Madhushala’ NFT. It was made available for bidding on November 1st, 2021 and the auction will run until November 4th, 2021. So far, on the first day of the auction, on November 2nd, Bachchan’s NFT collection received the highest ever bidding in India at Rs. 3,12,85,758. Salman Khan announced last month that his NFT collection will be available soon.

What is an NFT?

It is essentially a speculative cryptocurrency asset. It is one-of-a-kind and cannot be duplicated. To put it another way, a bitcoin is fungible, which means that if you trade one for another, you’ll get the same thing. A one-of-a-kind digital collectible, on the other hand, is non-fungible. If you exchange it for another one-of-a-kind collectible, you’ll get something completely different. For example, if you own the Madhushala NFT collection and decide to exchange it for Salman Khan’s NFT collection, you will end up with something new, or rather, something one-of-a-kind. Artists and creators now have a new medium to showcase their creations or collections thanks to the introduction of NFTs.

A brief history of NFTs

Kevin McCoy, an artist, invented the first NFT in 2014. It was a color-changing pixelated octagon. ‘Quantum’ was the title of the piece. The pulsating art piece is valued at Rs. 10,96,72,096 as of today. Yes, that is the value of the first NFT!

How do NFTs work?

The Ethereum blockchain contains the majority of NFTs. For those who are unfamiliar, Ethereum is a cryptocurrency like any other. Its blockchain, on the other hand, supports NFTs. It enables the storage of additional information, which distinguishes it from traditional cryptocurrencies. Other blockchains can implement their own versions of NFTs as well.

Are NFTs a good investment?

It is, after all, the new age way of collecting art, or whatever you want to call it. Anything one-of-a-kind that you buy gives you all of the rights to it. And, like stocks, this is a speculative asset. You buy it in the hope that its value will rise over time and that you will be able to sell it for a profit one day. If you want to invest in an NFT, make sure you know what you’re getting. Something important today may not be as valuable tomorrow.  At the same, its value may rise over time.

Speaking of value, here’s a valuable tip that will take you a long way in terms of sound financial behaviour. Keep checking your Credit Score regularly and be on top of your finances at all the times

Additional Reading: How To Make Checking Your Credit Score More Fun!

Where to buy NFTs

In India at digital marketplaces or NFT exchanges like beyondlife.club. Amitabh Bachchan’s NFT collection has been put up for sale at that exchange. Similarly, crypto exchanges can also facilitate these auctions and transactions.

Exchanges and financial markets all have one thing in common. They offer the most diverse range of financial products. They offer everything from Credit Cards to Personal Loans to BNPLs, as well as the ability to simply facilitate a trade. Everyone’s lives are made easier by the seamless platforms they provide. Artists are able to express their art while also monetizing it as a result of these digital marketplaces.

Additional Reading: Should You Get A Credit Card When You Start A Job?

At last, NFTs have the potential to become the new way of collecting art. Some even believe it to be so. However, one thing to keep in mind is that it is a digital asset. It can be copied and distributed through the internet. As a result, if you intend to use it as an investment instrument, you should avoid displaying it on the internet. That way, you preserve its uniqueness while hoping that its value rises. Besides NFTs, there are other ways of expanding your wealth. Interest rates for buying your dream home is lower than ever. Secure your future, invest in a home.

 

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

Leave a Reply

Your email address will not be published.