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Highlights
- In the blockchain community, NFTs have created a stir. However, many users are often left confused about them.
- Like cryptocurrencies, NFTs also use a distributed ledger to record each transaction.
- NFTs can be created in digital formats like a GIF after ensuring that it is your original work or something you can claim ownership of.
Nobody knew that digital assets would become so popular in just a decade when Bitcoin was first launched.
Apart from cryptocurrencies, digital assets like non-fungible tokens (NFTs) soared to popularity last year when celebrities, top entrepreneurs and sports stars started auctioning the NFTs through different platforms.
In the blockchain community, NFTs have created a stir. However, many users are often left confused about them.
We have got you covered if you are confused about NFTs or don't understand the concept. Here's your 101 guide to the non-fungible tokens.
So, what are NFTs?
Like cryptocurrencies, NFTs also use a distributed ledger to record each transaction and to make a final transaction; unique digital addresses are used.
NFTs represent unique ownership, and they can be in any form of a digital artwork like an image or a gif.
The major difference between a virtual currency and an NFT is that the non-fungible tokens cannot be transferred entirely and can only be traded or swapped.
If you're new to the blockchain community and want to explore NFTs, here's what you can do.
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1. Minting
Not many people know but creating NFTs is not so difficult, and they can be minted.
NFTs can be created in digital formats like a GIF after ensuring that it is your original work or something you can claim ownership of.
Also Read: Zilliqa (ZIL) crypto soars amid rising market. Here's why
2. Purchasing NFTs
It is not necessary to create NFTs, and they can be bought through digital marketplaces. Presently, several NFT marketplaces like OpenSea are among the top places for NFT buyers and creators.
3. Owning a crypto wallet
A crypto wallet is a must for people interested in cryptocurrencies and NFTs. An individual can secure private keys and digital assets in a crypto wallet, allowing users to send or receive virtual tokens.
Bottom line
A Technavio 2022 report suggests that the NFT market size is expected to register a compound annual growth rate of 35.27 per cent between 2021 to 2026.
However, this does not mean that one should start investing in the NFTs, as there's still uncertainty over the newly popular digital assets. An investor should be careful and research properly before investing.
Also Read: What is Dallas Cowboys crypto? All you need to know
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