An NFT (non-fungible token) is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
How Do NFTs Work?
Non-fungible tokens exist on the blockchain, which is a distributed public ledger that records transactions. You’re probably most familiar with blockchain as the underlying process that makes cryptocurrencies possible. Specifically, NFTs are typically held on the Ethereum blockchain, although other blockchains support them as well. Anyone who holds a cryptocurrency wallet can buy an NFT.
NFTs are gaining massive popularity now because they are becoming an increasingly popular way to showcase and sell your digital artwork. Billions of dollars have been spent on NFTs since its inception, which dates back to 2015.
Should You Purchase One?
NFTs are risky because their future is uncertain, and we don’t yet have a lot of history to judge their performance. NFTs, like any other entity, have a dark side to it too. In the recent past, several incidents of NFT scams have been reported including: emergence of fake marketplaces, unverified sellers often impersonating real artists and selling copies of their artworks for half prices.