More about tokens and coins
Cryptocurrency is a general term which refers to any digital currency developed through cryptography and…
Non-Fungible Token (NFT) is a term many have heard about in the last year, and the concept has almost taken off in social media and elsewhere online. Many people find it difficult to understand what NFTs really are and what they are used for.[nft]
In this guide we will explain to you what NFT is, in a simple and beginner-friendly way!
A Non-Fungible Token (NFT) can be compared to a digital asset, for example in the form of a file. This asset is stored on a blockchain and is 100% unique. This is the same technology used for, for example, cryptocurrency.
This has made NFTs favorable in terms of assets that are normally easy to counterfeit, such as art or collectibles. With an NFT, the buyer can be sure that the asset is genuine and original, as it is impossible to counterfeit.
In other words, if you buy an NFT, you have an asset – just not physically in front of you. You own the thing digitally, whether it’s a painting or an action figure.
The name “Non-Fungible token” can easily be translated to “token on an asset that is unique and irreplaceable” in Norwegian. A token can be considered as proof, and this allows the owner to prove that he / she owns the asset.[nft]
An NFT can be so much. These unique and fully digital assets are stored on blockchains, and in many cases they are photographs or works of art.
However, there are other assets that are suitable for the NFT format, such as domain names, card collections, game products, music and the like.
What many do not know is that an NFT can in practice also be linked to a physical asset. For example, you can buy a token from owning a bottle of expensive wine somewhere in France. In practice, NFT can thus be used on many types of assets.
Since NFT is based on a blockchain, it can be easy to compare it with cryptocurrency. However, there are certain differences. While you can buy 0.0001 of a Bitcoin, you can only buy one of an NFT. NFTs can not be divided.
An NFT is also not changed, as it is stored on a decentralized blockchain. It is also not possible to copy NFTs, which makes the technology very useful for brands and products that are prone to counterfeiting.
The proof that comes with an NFT can not be taken from the owner. The only exception is if the owner of an NFT loses a private key and password, and that this ends up in the hands of others.
It has long been a challenge to be able to authenticate or verify digital assets, as files can be easily copied. However, if you have an NFT, it is easy to prove that the asset is 100% authentic.
It is always possible to trace the asset back to the manufacturer / creator, thanks to the blockchain technology. If this should not be possible, it indicates that the asset is a forgery.
It would take several years from the time NFT was first experimented with, until it would take off in the market. As early as 2012, NFT experiments were performed. In 2018, NFTs had a market value equivalent to about 41 million US dollars.
In 2019, this value was to increase by a further 245%, and then by 139% in 2020. In 2020, NFTs had a total value of 338 million US dollars.
In 2021, the trend has not reversed, and there are many indications that NFTs are more than just a trend.
Imagine an artist posting a digital artwork for sale on a trading platform. The artist can then set a price or put the artwork up for auction. The person in question can also decide on any royalties he / she must have on resale.
You as a buyer can bid on the artwork or buy it directly. You will then receive a so-called smart contract. This is a contract that is stored in a blockchain.
You can then download your NFT in the form of a file, and you will also receive a certificate that you can keep in a digital wallet. The seller who sold the artwork will also receive their payment.
If you resell the artwork five years later, the contract will accompany the work so that the new owner takes it over. You as the seller will then receive payment for the artwork, and this will correspond to the requirement you have for commission. The commission can, for example, be 10%.[nft]
There are several methods for you who want to get started with NFT trading. In principle, it is possible to develop your own smart contract. This can then be distributed in a blockchain. You can then pay the cost of the transaction and execute the trade.
In our NFT guide for beginners, however, we want to emphasize that it is absolutely easiest to shop through an NFT marketplace. Here are some of the most popular options in this regard:
If you want to buy an NFT, you must first have a digital wallet for cryptocurrency. This is necessary to be able to use the platforms we mentioned above. You must also have available cryptocurrency in your wallet.
Yes, especially if you are going to buy collectibles, art or other assets that can easily be counterfeited otherwise. A digital asset may seem meaningless to some, but very many have opened their eyes to this modern concept.
Explore NFTs at OpenSea or others, and find out if this is for you.[nft]
OpenSea er en anerkjent plattform for kjøp og salg av NFT-er, og kan friste med et stort utvalg av digitale eiendeler.
En NFT kan være både dyr og billig. Den dyreste NFT-en som har blitt solgt hittil er kunstverket «EVERYDAYS» fra Beeple, som kostet 69 346 250 amerikanske dollar.
NFT-samlingen CryptoPunks selges hos OpenSea, og er en svært populær samling som består av 10 000 forskjellige karakterer.