NFTs can be difficult to comprehend by many individuals due to the confusing vocabulary used to describe them. The sophisticated mathematics behind the technology makes it difficult for people to begin a conversation on the topic.
At Black Swan not only are we huge crypto advocates but also passionate crypto education promoters. We want to help simplify the complexity behind NFTs and explain the value that they hold in today’s world.
NFTs, also known as Non-Fungible tokens are basically digital assets. The word “Non-Fungible” means being non-replaceable i.e, unique. Unlike Bitcoin for example, which IS fungible, meaning that if you trade one bitcoin for another bitcoin it’s the same thing. The value of Bitcoin will remain the same. Non Fungible Tokens are NOT fungible because they are one-of-a-kind. If you choose to trade it for another NFT, you could potentially get an NFT that is lower in value than you previously had.
A very basic example of looking at NFTs is like trading cards. If one person had a prime Lebron James trading card, they wouldn’t exactly trade it for a prime Carmelo Anthony trading card. Even though the Carmelo Anthony trading card has a lot of value, it’s nowhere near the amount of value the Lebron card possesses. Similarly, NFTs are collectibles but for the digital world.
Non Fungible Tokens are one-of-a-kind because of their unique identification codes that are stored on the blockchain to represent ownership of that asset’s transaction. Once minted onto the blockchain, NFTs cannot be replicated by anyone. This decreases fraud and promotes sole ownership of the digital collectible.
What Counts as an NFT?
NFTs can be anything. They can be avatars, digital art, drawings, music, videos, and even tweets! The opportunities are endless and as more and more people start to embrace their creativity, they buy and sell NFTs as a means of having ownership over that item online. Due to every NFT’s unique property, they all contain different values.
Why Purchase an NFT?
Originally, many individuals purchased non-fungible tokens as a means to store their crypto and increase its value over time through the art piece’s increase in demand due to low supply. However, more use cases have come out of this space like allowing artists to connect with their fanbase, creating a community of like-minded people who contribute to making positive changes in developing countries, or making an “exclusive” club for those who hold specific NFTs and providing them with exclusive perks and benefits, etc.
As of today, NFTs are being used as gaming and art collectibles. However, these are just the introductory stages of what NFTs are capable of doing. Sooner or later we will be implementing NFTs in our house leasing signatures, event tickets, legal documents, healthcare documents, car ownership documents, and so many more options.
Disclaimer: The information and content manifested on the Black Swan Bitcoin blog are for educational purposes only. Nothing published by Black Swan Bitcoin constitutes as investment recommendation, nor should any data or content published by Black Swan Bitcoin be relied upon for any investment activities.