If you are active on any major social media platform, it is likely that you have been exposed to NFTS. NFTs are sometimes categorized as futuristic investment tokens, but they are so much more than that. In this article, we will explore what an NFT is and why they are so powerful. Being informed as to what this phenomenon is, and how it can start to appear in your gaming experience, will help you understand the true motive behind them.
What Is an NFT?
Let’s start by understanding exactly what an NFT is. NFT stands for non-fungible token. This phenomenon is a specific identifier that appears in a digital space, owed by one single individual. This technology uses the same methodology used to create a blockchain. As a result, these NFTs cannot be exchanged for another asset. This differentiates NFTs from other similar assets, such as Bitcoin.
In the gaming world, an NFT can exist in the form of video, animation, design, or even sound effects. These assets can be linked to both digital and physical creations.
Investing In an NFT
It is important to know before investing in an NFT, that these assets alone do not signify investments. This is why it is so important to understand the potential value of the asset you are buying, prior to being convinced to purchase an NFT. If you buy an NFT, you will be able to say that you are the sole owner of an original digital file. Typically, people make money by selling NFTs that they have bought, for more money than the original purchase price.
NFTs V.S. Crypto
NFTs and cryptocurrencies are both considered digital tokens. However, NFTs are quite different from typical cryptocurrencies. Cryptocurrencies can be interchangeable, while NFTs are one of a kind. Both of these assets exist on the blockchain, but due to an NFTs individualized nature, they do have key differences.
How Do You Buy an NFT?
There are two different spaces in which you can buy an NFT. The first is called a centralized NFT marketplace. This marketplace will have stricter guidelines to facilitate the buying and selling process. A centralized marketplace will make sure that all copyright laws are followed, and that buyers and sellers are in compliance.
The other space in which you can buy NFTs is called a decentralized marketplace. In a decentralized marketplace, anybody can buy or sell NFTs. As a result, there is a higher risk of copyright infringement, which can make your NFT less valuable or even cause you to purchase a fraudulent asset.
So, it is typically recommended to buy and sell NFTs through a centralized marketplace, so that you can have the most confidence in your asset purchase.
We hope this article helps you better understand what an NFT is, and what sets it apart from other types of cryptocurrencies. These are extremely valuable assets, and they are occurring more and more in the gaming industry. Be sure you are up-to-date on your research so that you can be informed as to what the information you are seeing truly means in the playing space.