Join 100,000 entrepreneurs who read us every month
What you need to know about NFTs goes beyond a simple definition of what an NFT is. So we’ve loaded this brief with details on where to buy NFT tokens, how they differ from crypto, what they’re used for, and even a few thoughts on whether buying NFTs is an inevitable next move.
Let us know if there’s more you need to know about NFTs so we can follow up with your concerns. But, for now, let’s get to NFT essentials through NFT basics.
A non-fungible token is the acronym expansion for which you’re looking. In other words, that is what NFT stands for; it is a “non-fungible token.” And what is that, do you still wonder? We’re right there with you.
First of all, it might help to clarify what fungible even means. No harm in not knowing; it certainly isn’t a word we use every day. So, fungible would be something that you can easily exchange or replace for something precisely the same. For example, say you had 3 dollars and exchanged it for another 3 dollars; that would be a fungible exchange.
The best definition of a fungible item would probably be equally exchangeable for something just the same.NFTs, however, don’t come into play that way. On the contrary, non-fungible tokens are (let’s say) “coins” designed precisely to be exchanged for something other than more NFT.
We could just smell the question a hundred miles away. So what would you exchange NFTs for, then? And that’s where their beauty comes in.
NFTs are used as a means of digital assets. Yet, they’re meant to be exchanged for objects, such as games, music, and art, especially! As a result, there’s tons of movement in terms of digital artwork in this niche.
This sort of currency comes with built-in authentication, too, which is how ownership is innovatively validated and/or transferred. The plus to it, however, is that royalties can be programmed into them, making it possible for original creators (in the case of art pieces, for example) to monetize a specific percentage on any subsequent sales of that actual item.
Do you so far think lowly of NFTs? The story goes that a GIF alone has been sold at a $600,000 value in what can be considered “a whole new meme economy.” As the same source cites, “Crypto art represents a $100 million market.” Congrats to Nyan Cat for the more than half a mill win!
To get NFTs, start by looking for the most convenient wallet in which to store them. Then, find out who takes NFT, which will likely require you to get some crypto first. Care about the difference between cryptocurrency and NFT tokens? We’ve also got you covered there, and we’ll expand on that in the question below.
But, for now, once you’ve chosen a wallet with acceptable fee charges for you (as those can fluctuate) that takes NFTs, you can start making online purchases wherever that wallet is accepted. So, take that factor into account for your choices. You want to be able to fund your wallet as much as using it to buy items elsewhere. And there are platforms for that.
But bear in mind there are tons of other sites that can also be more specialized toward the products of your interest. These can be as specific as NBA Top Shot, for instance, an online space devoted to “NBA Officially Licensed NFTs.”
Take your time to make decisions you won’t regret but will make you happy, on the contrary. Now, back to that question we promised.
Well, let’s say NFT and crypto come from the same blockchain kind of womb. They stem out of the same source, so to put it, as digital currencies. However, it’s also as if they had been separated at birth because there’s nothing more binding to the two than that similar origin.
Nothing else, not even paper and regular money such as dollars, can compare to NFT tokens because everything else tends to be exchangeable for its kind. So you can trade a Jackson (the man on the $20 bill) for a new set of dollars anytime, just as you would crypto. But NFT is non-fungible, remember? Which makes this kind of token simply unique.
To buy some, you’ll probably need either a credit or debit card or a PayPal account. And that will be used to get some cryptocurrency that will later let you exchange to NFT in the wallet you choose.
Again, look out for exchange and other fees anywhere you go to get, sell or buy with these. But, does that mean you should go for it? Let’s hit our last question below before we let you go.
Do so if you’re aware and up for the risk is one of the first and primary considerations to this “no wrong answer” kind of response. As these kinds of currencies depend merely on how much demand there is for a particular product, few other standard financial or investment variables on which to base any certainty for these shopping and exchange decisions.
In the end, it might be best if you solely invest in what you’re comfortable owning for no NFTs (or other wins) in return. That’s a highly likely scenario, so you might want to start conservatively and look at your collections as something you’d like to keep even when no one is willing to buy the items three days, years, or decades from now. This is all a brand new field, so there are these kinds of risky considerations to make.
As a collection, however, also take into account that taxes might not be as lenient. And they can go up if your product’s price tag does, as well. Tax rates and fees can spike based on your local jurisdiction’s take on NFTs and collectible items.
So, there you have it! So far, for the start of what you need to know about NFTs.