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Maybe you have seen in the media what astronomical sums are partly spent on NFTs. Whether on the digital art market or on the gaming market, more and more NFTs are being traded.
Is it a hype or is it the future? Digital objects that cannot be copied play a central role, especially for the emerging metaverse. We will clarify what this is. But first, let's ask some questions about non-fungible tokens: What are NFTs, what does NFT mean and, quite honestly, what are the benefits of an NFT?
This and some more in the post!
If you have any more questions on the topic, we look forward to an exchange in the comments!
The abbreviation NFT stands for Non Fungible Token. So a non fungible digital protected object.
So much for the NFT definition, but does that answer the question "what does NFT mean" for you? Probably not completely. Instead of diving too deep, let's clarify this later with how NFT works. Let's first look at what the possible NFT applications are and then talk about how NFTs work and clarify the question "what are NFTs".
The NFT application areas already point in the direction of what NFTs are useful for. Because justified between all the wild price speculations of NFT artworks, the question "what brings a NFT?" comes again and again. And rightly so!
An NFT ensures uniqueness of digital objects.
Why would I buy a non-copyable version of a digital object if there was no NFT application at all? In an increasingly digital world, our lives are becoming more and more digital. Generation Z doesn't know a world without a smartphone because they grew up with it. Who in Q4 2021 will use the Keynote from Facebook, respectively the now to Meta renamed companies knows where tech corporations want to take us.
Our everyday life, our private and working life is to take place more and more digitally. Equipped with VR glasses, we "live" in phenomenal artificial worlds and build an identity there. As in real life, people also want to be in digital worlds like the Metaverse be unique. Your Avatar there should not be able to be copied by your begrudging neighbor and misused for foreign purposes.
Also in Video games (the gaming market is one of the biggest industries ever) unique objects become more and more interesting. Armor, outfits or weapons that are only available once make games especially interesting.
Event tickets the not illegal are another possible application of NFTs. Also Music which always belong to the artist and are clearly assigned so that the artist has the rights over his NFT art pieces are a practical NFT application.
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Very roughly and briefly we would also like to look at how NFTs work, as the question has been asked again and again how does an NFT work?
An NFT consists of information blocks that are part of a chain of information blocks on the so-called Blockchain are. Each of these blocks contains information about the digital object and a kind of digital fingerprint (hash value). Furthermore, the hash value of the previous block is included, which protects the blockchain against manipulation from the outside. Depending on the blockchain, there are different methods to ensure security. Here then come Cryptocurrencies etc. come into play. For the sake of simplicity, however, we do not want to go into any more depth on the original question at this point: How does an NFT work?
The technology sounds exciting, but you may be asking yourself: should I buy NFTs?
Good question! Honestly, with the first hype in NFT`s we thought they were totally superfluous or complete niche applications. But at the latest with NFT applications like copy-proof tickets, art pieces with clearly assigned originator etc. they became tangible for us. The penny then dropped with the transformation of Facebook into Meta and the announced Metaverse. Should our world really go in this direction in a big way, NFTs can play a central role. But even then it is questionable whether certain NFT art, such as a bored monkey (Bored Ape Yacht Club has published very highly traded NFTs of bored looking monkeys) is valuable or is pure speculation.
As always, you can make money in many places, but you can also lose money. You are an absolute nerd and know what you are doing? Exciting speculations (yes, we deliberately do not write "investments") could be waiting here. But if you don't know the answer to the question: What are NFTs, or what exactly you are doing, you should be careful. With all risk investments, a strategy is recommended, which is why we centrally Core Satellite Strategy show.
For those who want to at least check out the NFT marketplaces or even create and sell their own NFT, here are two great places to start:
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You now know what an NFT is and you also know what NFTs are useful for and how they work. Whether you should buy NFTs is a completely different question that you have to answer yourself. We know too little about the NFT market so far and are therefore still looking at it from the outside, but with great interest.
We hope that the central question: What are NFTs is clarified and that we could give you some more information. What is still unclear for you and what would you like to know about NFTs? Feel free to leave us a comment!