What is it and is it worth the investment?

  • The The basics NFTs
  • Application areasThe opportunities and risks

from U.S NFT – Non-Fungible Token – You want to buy or sell, you find a lot in the financial market many possibilities to me. It is important to have a sound basic knowledge of non-replaceable tokens; This is the only way you can decide for yourself how reasonable the investment is.

Here’s what you need to know about NFTs

The term NFT has led to a huge rush in the financial world: not only private individuals, but also large companies such as Visa have already bought NFTs. The reason for this is that since the advent of NFTs is associated fomo . phenomenon (“fear of getting lost”): you are afraid of getting lost; After all, NFTs promise to make a big profit.

The term “NFT” stands for a non-fungible code. So it is purely digital, Not replaceable Things; You are UniqueThe Not replaceable be. This fundamentally distinguishes them from cryptocurrencies: coins, such as bitcoins, can be exchanged for each other. You can imagine this as exchanging a 5 euro note for another 5 euro. The areas in which NFTs are used are varied; Especially in the arts However, it is very popular. This can be logically deduced: artworks are unique pieces that are not found again in the same edition. If you tie this to the digital market, it becomes more complex: artworks can be copied as much as you like, so that the original is often difficult to find.

NFTs are designed to address this issue using “smart contractsSolution: This is a kind of “property contract” that on the blockchain committed. With a link, the nodes point to a uniquely identifiable object, such as a meme or an image. Only if the NFT is also written on the blockchain will it also be considered verified. For example, one of the most popular blockchains is Ethereum. In addition to the link, the smart contract records the NFT when NFT has been sold out From Heard and whether there is one Transaction date be. Additionally can Conditions which specifies, for example, that the buyer of an NFT gets 10% of the purchase price if he resells it. The object itself, i.e. the file, is stored either on a server or on another blockchain. However, in terms of artwork, the analog board can also be digitally reproduced. The owner can choose To sell the unique piece in stock: For example, you can own a hundredth of a famous painting. Artists can benefit from selling NFTs if they enter additional paragraphs (like the 10% statement in the example above).

Types of NFTs, Risks, and Opportunities

NFTs are not only used in the field of art: it is one of the largest areas of application metaverse. It is possible to purchase avatars or items to use in the metaverse. An example of this is luxury fashion brand Gucci, which has sold digital handbags in the name of NFTs for thousands of euros. Also NFTs too Sports trading cards is particularly popular; An example here is the German Football Association, which issued NFTs for sports trading cards for players. Other examples CryptoPunk NFTs, Tweet NFTs, or Movie Scene NFTs; So each unique item can be sold as an NFT.

But NFTs also have drawbacks: They are basically just a proprietary fantasy. Usually the owners only pursue the goal of owning a unique item of great value and also presenting it to the public. Additionally, while NFTs are Unique, but not rare: An NFT object can be digitally copied over and over again and thus appears multiple times as a copy on the Internet. In addition, there is a warning of fraud and pyramid schemes.

In the long term, NFTs are likely to remain: Anyone can create and sell NFTs. Success with NFTs, however Especially famous artists: Only here many crave the thing, which makes it possible to order a large amount. However, one should always be careful not to fall into short-term hype, but every investment to think carefully. Thus, not every purchase of an NFT makes sense: one must always keep in mind that the value is purely speculative and things are not replaceable. So you may not find a buyer for your NFT.

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