The Internet has been one of the discoveries that shaped the various aspects of several generations. However, we have a new term these days – Blockchain. It is emerging as the new thing in the world as more and more applications are coming up. Cryptocurrency is arguably one of the most famous entities of blockchain technology. But again, we have another rising star these days, i.e., NFTs. People even trade in these using nft wallet or other means. So, here is how one can trade NFTs just like they do in their cryptocurrencies.
What is an NFT?
It stands for Non-fungible token. Unlike cryptocurrency, an NFT is unique and can’t be replicated or exchanged. It can be understood with a simple example.
It is possible to exchange 1 dollar with another 1 dollar. So, exchanging 1 bitcoin with another 1 bitcoin is possible. However, exchanging 1 dollar with 1 Euro is not possible since these are different currencies. So, one can’t exchange their NFT with someone else’s. They can either buy or sell.
Also, NFTs are capable of representing real-world assets like famous paintings, real estate, and more. These can also represent a person’s identity, their rights to property, etc. Hence, even these entities can be sold or bought using NFTs.
NFT trending and need for nft wallet
Like cryptocurrency, NFT is also becoming popular, and people sell it for enormous amounts. From video games to the art market, many brands are also jumping into the market to reap the early benefits of investing in non-fungibles.
When it comes to trading, several dedicated platforms for buying and selling NFTs have come up, like the mint, not the app. The selling does not involve the literal transfer of the item that the token represents. For example, selling an NFT of the Mona Lisa doesn’t mean that the token buyer will receive the actual painting. The certificate of ownership is handed over to the buyer instead. The certificate is stored in the blockchain network, and a transparent record of each transaction is also maintained.
Like crypto, NFTs have dedicated digital wallets where the buyer can safely store the certificate of ownership. One can also retrieve this code on paper in a code. The buyer also needs to hold a sufficient amount of cryptocurrency to buy a token. Further, anyone can create their unique NFTs with some knowledge of the technical aspects of the process.
What are the risks?
Buying and selling NFTs is a technical process that can involve some risks. Since each interaction on the blockchain needs tons of computer calculations, users also need to pay for that. Some new traders are not aware of the technicalities and lose money. Further, the pros also use bots to stay on top of the market, making it less accessible to new players. All this makes it a call where only the ‘fittest’ can survive.
However, new investors can thrive if they thoroughly do their due diligence and research before entering the trading market.
So, despite the risks, the rising NFT market holds tremendous potential. It is already witnessing trade worth billions in a single year. The explosion seems inevitable with the top brands from several industries investing in NFTs.