NFT is an increasingly popular concept today. Although cryptocurrencies immediately come to mind when it comes to NFTs, NFTs have a very different application in themselves. Although NFTs generally cover cryptocurrencies, they are more related to digital artifacts. This new technology, which combines technology with art, managed to reach an average volume of 20 billion Euros in the second half of 2021. (Source: https://www.reuters.com/markets/europe/nft-sales-hit-25-billion-2021-growth-shows-signs-slowing-2022-01-10/)
What is NFT?
NFT stands for “Non-Fungible Token“, which is becoming increasingly well-known in the art world as well as in the investment world. The special feature of NFT is that it can prove ownership of a digital product. This allows digital artworks to be easily added to collections and easily transformed into verifiable assets within blockchain commerce. In other words, in NFTs, the producer, first owner, second owner, etc. of a digital artwork is always recorded and its authenticity is verified through blockchain technology.
Before the emergence of NFTs, the concept of digital art was not taken seriously. This was because digital artworks could be reproduced with a single click of a button and there was nothing to distinguish them from the original. Today, however, it has become impossible to imitate a digital artwork. In fact, while a human cannot tell the difference between two different A4 sheets of paper, this is not even the case with NFTs. NFT technology can record the first owner or producer of almost anything that is digitized.
The biggest difference between NFTs and digital currencies is that all NFTs are created differently from each other. This makes each NFT immutable and private.
What are NFTs good for?
NFTs are built on the blockchain, just like cryptocurrencies. Just as cryptocurrencies today have a clear counterpart, even if it’s digital, NFTs also have mixes, even if it’s digital. A photograph, a text, a song or a painting by an artist can be digitized as an NFT. The reason why NFTs are valuable is that each NFT is unique. So when an artist’s painting is digitized as an NFT, the identity of the producer of that NFT will forever be unchangeable. Likewise, if this NFT is sold, the first buyer will also be recorded. NFTs are traceable. No matter how many times they are sold, the manufacturer and previous owners will always be known.
Blockchain, NFT and crypto gaming explained … – Enkronos
Why Do People Invest in NFTs?
We all know that NFTs can be easily copied, reproduced, or counterfeited online. So why do people invest in NFTs? Because NFTs always remain original, no matter how many copies they are made. Other copies are always fake and worthless. Therefore, people buy NFTs and enjoy sharing them on their social media accounts. This causes the value of NFTs to rise.
Another reason to invest is the desire to be part of an online community… Owning some NFTs gives them access to exclusive content and live events.
Many investors who enjoy digital investing have also turned to the NFT market. Buyers and sellers, also known as traders, try to buy NFTs cheaply and sell them expensively. Of course, it should be noted here that the original producer of the NFT is paid a certain amount of royalties on each sale. In other words, if the producer has set a royalty rate of 10 percent commission on his NFT, 10 percent of the total sales price goes to the producer every time this NFT changes hands. As you can understand, especially artists have become able to earn regular incomes with NFT technology. In short, it seems that NFTs will continue to popularize and gain a permanent place in the digital universe, regardless of financial or artistic concerns.
Would you like to create your own NFT collection? Contact Enkronos today.