NFTs have managed to grab the attention of many individuals interested in the financial market. However, despite this topic being in the limelight, it’s often assumed that the reader is already familiar with the concept of NFTs, which is not always true. To avoid taking unnecessary investment risks, it’s important that you familiarize yourself with NFTs a bit more than simply knowing the meaning of the acronym itself.
Granted, not everyone has the time or the interest to spend dozens of hours to become some sort of NFT connoisseur; you might just want a quick rundown on the important bits, which is exactly what this article will aim to provide.
So what is an NFT?
NFT stands for non-fungible token. There are two important aspects to it, the first one being fungibility. Fungibility is the interchangeability of an asset for another one of the same type. For example, a $20 bill can be exchanged for other $20 bills, as they are all $20 bills and therefore worth the same. This is also true for cryptocurrencies, or rather, most currency types. That being said, a non-fungible good doesn’t have this interchangeability. Works of art, for instance, are non-fungible goods.
Another similarity to the art world is the fact that NFTs are usually tied to an artwork, often a character of sorts, but the subject can vary greatly — virtually anything that can be represented in a visual way can be made into an NFT.
The other important aspect of NFTs is the fact that they are blockchain-based tokens……Read More