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What is an NFT? How do NFTs work?

What is an NFT? How do NFTs work? | Jungle NFT

The growing hype about non-fungible tokens, or NFTs, makes people wonder if it is worth investing in or not. Nevertheless, the NFT market value is booming day by day, attracting the interest of investors. Many of them are looking to invest in NFTs by Jungle which are available on the Jungle NFT Marketplace.

Non-fungible tokens are seeing a rapid rise in popularity, but not many Americans know what they are. So, to give you a better idea, we will cover vital things about the non-fungible tokens.

What is an NFT?

NFT is a virtual asset that symbolizes real-world items, such as:

  • Video
  • Various in-game items
  • Music
  • GIFs
  • And much more!

You can buy and sell them on multiple online places like the Jungle NFT Marketplace. To purchase or sell any NFT on Jungle, you need to use cryptocurrency. Also, NFTs are based on blockchain technology and have the same encryption codes as cryptocurrency.

What makes NFTs unique?
Scarcity is the reason behind NFT’s high value. They are usually one of a kind or have a distinctive identification code. The law of demand and supply explains the high worth of NFTs. Since they are in high demand and low supply, NFTs have a high value.

Difference between NFT and Cryptocurrency

Many people tend to confuse NFTs and cryptocurrency as the same thing. That is not true since both of them are different. One thing common between cryptocurrency and NFT is that they are both on blockchain technology. Apart from that, there is no similarity between them.

Validity
NFTs are like a subset of cryptocurrency. You need to have cryptographic types of money to buy or sell NFTs. Therefore, we can consider the NFTs as a subset of the cryptocurrency.

Fungible
The main thing about crypto is that it is fungible. It means it holds a certain value, and you can use cryptocurrencies to make transactions on the blockchain. That is not the case with NFTs since they have a digital signature and have different values.

Example
The value of one ETH will be the same as the other one. However, the NFT of an NBA shot will not be the same as another one due to the particular moment’s importance.

How does an NFT work?

NFTs are commonly on the Ethereum blockchain. However, you can also find them on other blockchain systems. People use NFTs as digital assets with complete ownership rights. They can transfer the token if they intend to sell the NFT.

Various NFTs

You can create or mint an NFT using the Jungle NFT Marketplace. It can be a digital representation of any tangible or intangible object, such as:

  • Virtual avatars and video game skins
  • Videos and sports highlights
  • Tweets
  • Designer sneakers
  • Collectibles
  • Art

Also, owners and creators can add their specific details, such as their signature, to an NFT’s metadata.

What are NFTs used for?

The NFTs give the artists and creators a unique opportunity to earn money for their craft and skill. Artists won’t have to rely on the galleries to sell their artwork. Instead, they can go to the Jungle marketplace and sell their art and crafts.

The best thing is that the artist does not have to give any commission on their hard work. They can keep all the profit for themselves. Moreover, they can take advantage of royalty to earn money for their art. And this is not the only way you can make money through NFTs.

Brands like Charmin and Taco Bell auction their NFT theme to get money for charitable purposes. Furthermore, celebrities like Snoop Dogg, Lindsay Lohan, etc., are also taking advantage of NFT hype and getting one for themselves.

How to buy NFTs?

You might wonder how you can get your hands on the most precious and rare NFTs. So, to help you out below is a step-by-step process that makes the entire procedure to buy NFTs straightforward.

Step 1 - Get a digital wallet
If you want to build an NFT collection, the very first thing you will need is a digital wallet. It has a pretty same function as a traditional wallet where you keep your money and credit card. Only in the case of a digital wallet, you will use it to store NFTs and cryptocurrencies.

Step 2 - Choose the currency
Once you get a digital wallet, the next thing you need is to choose the cryptocurrency for the NFT. Usually, Ether is the most common currency for the NFTs, but different providers might want another type of currency. You can head over to any exchange, buy the currency you need, and move it to your digital wallet.

Step 3 - Go over to the marketplace
After setting up your wallet and having the funds in it, you can head over to any NFT marketplace. You can use the funds to buy or sell virtual assets on these marketplaces. However, with so many options available, you might think about which one is the best NFT marketplace.

Below are the top NFT marketplaces where you can shop for your favorite NFTs.

1. Jungle NFT Marketplace
Jungle NFT Marketplace is the best space for artists to find and purchase unique and interesting NFTs and other digital arts. It has an easy-to-use setup for the users to buy the rare NFTs without going through a lot of hassle. You can also enjoy a community-driven design, making it ideal for anyone to use.

2. OpenSea
Another NFT marketplace is OpenSea. All you have to do is create an account on OpenSea and navigate its extensive NFT collections. Also, the platform allows you to sort the different NFTs by their sales. As a result, you can discover new artists and their NFTs easily.

3. Rarible
One of the most popular NFT marketplaces is Rarible. It has the same characteristics as OpenSea, and it enables the artist to share their art with the rest of the world. You can issue, purchase, sell and buy NFTs through this platform after creating an account.

Should you buy NFTs?

The world of NFTs is revolutionary and full of surprises. So, if you plan to buy NFTs just to jump on to the bandwagon, it will not be an optimal decision. Like any other investment, NFT comes with certain risks. The uncertainty of its future with no financial backing makes it a volatile investment.

Experts find it difficult to analyze its performance trajectory since there is not much data or history. However, the growing demand and the value of the NFTs would want you to get a slice of it. The ideal thing to do here is to start investing a small amount of money into the non-fungible tokens.

Simply put, you can consider investing in NFTs if you have a spare amount of cash available. You can keep it for some time and sell the NFT for a profit. Also, you can purchase an NFT if the art or the piece is significantly important to you.

However, the thing that drives the NFT’s value is its demand. Unlike stocks or ETFs, there are no economic or technical indicators to assess their value. Therefore, the worth of your NFTs will solely depend on the demand. You should check the rarity of the NFT before you decide to purchase it.

Since the NFT value will depend on the demand, you need to have a strategy to get the best one. Here is what you should do before investing in one:

  • Do your thorough analysis regarding the NFT
  • Comprehend all the risks
  • Create a backup plan if things go south

Takeaway

Blockchain is going to change many aspects of your life. The growing incorporation of this technology means NFT will become more common. Therefore, you should keep an eye on NFT shortly.

FAQs

Below are some common FAQs regarding NFTs in the Jungle NFT Marketplace.

What does NFT mean?
NFTs represent the distinctive cryptographic tokens available on the blockchain. The non-fungible tokens in the Jungle NFT Marketplace represent real-life things, such as artwork/real estate, and are non-replicable.

What is an NFT and how does it work?
NFT stands for non-fungible tokens. It is a virtual asset that showcases real-world objects. Also, you can buy and sell these NFT online through cryptocurrencies. Creators create or mint the NFTs with the help of the Jungle NFT Marketplace.

How much is my NFT worth?
There is no clear way to assess the net worth of any NFT. You will have to consider various factors, such as uniqueness, rarity, demand, etc., to know about the value and worth of your non-fungible token.

Is NFT actually worth anything?
NFTs have worth because of their unique features. Their foundations are on cryptographic technology, making it impossible to replicate and create something similar. For the reason of scarcity, people ascribe worth to the NFT.

How do I know if my NFT is rare?
A non-fungible tokens rarity depends on the availability of the copies. If there are substantial copies of the NFT in the market, it is not a rare NFT.

Reference Links:
https://www.analyticsinsight.net/nfts-vs-cryptocurrencies-what-is-the-difference-between-the-two/

https://www.simplilearn.com/tutorials/blockchain-tutorial/what-is-nft

https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

https://www.creativebloq.com/features/what-are-nfts

https://ethereum.org/en/nft/

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