Fungible vs. non-fungible

Before we delve into NFTs, it’s essential to grasp the concept of the “non-fungible” aspect within the term “non-fungible token.” When an item is considered fungible, it implies that it can be easily exchanged or replaced with another identical item. A prime example would be a $1 bill: you can trade it with someone, and both of you would still possess $1.

On the contrary, non-fungible indicates that the item is entirely unique, thus possessing its distinct value. For instance, two cars of the same make and model might differ in value based on factors such as mileage, accident history, or previous ownership by a celebrity.

How do NFTs work?

NFTs operate on blockchain technology. The blockchain is basically a large, digital, public record. The most popular blockchains are distributed across many nodes (read: people’s computers), which is why you’ll hear them described as “decentralized.”

So instead of a central company-owned server, the blockchain is distributed across a peer-to-peer network. Not only does this ensure that the blockchain remains immutable, it also allows the node operators to earn money, instead of a single company. Because the blockchain records and preserves history, it is uniquely positioned to transform provable authenticity and digital ownership.

When someone creates, transfers, buys, sells, or otherwise does something with an NFT, that all gets recorded on the blockchain. This is what enables authentication.

This record serves as a permanent statement of authenticity that can be viewed or accessed by anyone. Today, when you buy a piece of art or a collector’s item, it typically comes with a paper certificate of authenticity, which you must then keep track of forever. It is easily forgotten, lost or destroyed, creating a very fragile system for authenticity. Blockchain’s offer a simple and more secure solution to this long standing issue of proving authenticity.

Let’s say you want to buy a piece of artwork from Tyler Hobbs. With NFTs, you can see the entire history of that piece, all the past owners, every sale, all the way back to Hobbs’ original creation of the piece. Without NFTs, you wouldn’t know if you were buying the real piece or just a really good fake.

How are NFTs created?

The initial stage in creating an NFT involves the process of minting. Minting involves the transformation of various digital files, including images, videos, and audio, into crypto-assets on a blockchain. By existing on the blockchain, the NFT becomes more resistant to manipulation and tampering. The distinct data within an NFT simplifies the verification of its authenticity and ownership.

Moreover, when an NFT is created, the owner or creator has the ability to include specific information within it. For example, artists can sign their artwork by incorporating their signature into the metadata of an NFT.

Do you actually own NFTs?

For majority of the NFTs, there can only be one owner at a time. The ownership is managed via a unique ID and metadata that other tokens can’t replicate.

However, fractional NFTs are also beginning to gain some traction. A fractional NFT takes a whole NFT and divide them into smaller fractions, allowing different numbers of people to claim ownership of a piece of the same NFT.

What are NFT blockchain platforms?

An NFT is a crypto asset representing something unique and collectible using blockchain technology. But what exactly is a blockchain? It is essentially a distributed database for recording and storing information. This database is also referred to as a digital ledger, and its decentralized network ensures that data cannot be hacked or manipulated. NFTs are digital assets that leverage blockchain technology to ensure authenticity and security.

Specific to NFTs, marketplaces exist to offer a secure platform for different collectors to buy, trade and sell their NFTs on the blockchain. These marketplaces have a wide variety of non-fungible tokens for sale, ranging from famous artists to even amateurs.

Ethereum

Ethereum is a decentralized, open source blockchain platform powered by its native cryptocurrency, ether (ETH). Ethereum smart contracts allow participants to develop all sorts of decentralized financial services and applications.

BNB Chain

An abbreviation of Build' N Build, the BNB Chain is expanding and building on decentralization. The BNB Chain aims to increase interoperability and develop the underlying infrastructure of the "world's parallel virtual environment,"

Polygon

Specifically tailored to the Ethereum ecosystem, Polygon offers developers a framework for creating Ethereum-compatible blockchain networks and scaling solutions.

How to invest in NFTs?

When choosing to buy an NFT for speculative purposes, it is important to analyze the different factors that may influence an NFT’s value. These metrics include Utility, Rarity, Community Size, Trading Volume, Potential and Provenance.

Keeping these indicators in mind helps in better evaluating the longevity and value of an NFT project for your NFT collection or crypto portfolio.

What are the different types of NFTs?

Massive interest in non-fungible tokens (NFTs) has led to a boom in crypto-collectibles and NFT art. Some of the most popular NFT use cases are Art NFTs, Collectible NFTs, Finance NFTs, Gaming NFTs, Music NFTs, Real-world asset NFTs, and Logistics NFTs.

Where to buy NFT tokens?

From being a medium of exchange, acting as staking rewards and in-game currency, NFT tokens have great utility in metaverse projects. To purchase your NFT tokens, you can do so via the Holio Platform, home to a wide range of NFT tokens.

Sign up for an account to get access to popular NFT tokens and invest in the NFT market today.

How to buy an NFT ?

In order to buy an NFT, you’ll need a crypto wallet and cryptocurrency (or, in some cases, just a credit or debit card). Using OpenSea, you can buy items listed for sale instantly, bid in auctions, or make offers on any NFTs.