Are you also hearing a lot about investing in NFTs? Do you also want to invest in NFTs? In this article, we will tell you why people are investing in NFT and how you can start investing.
As time changes we can see a lot of changes in technology. It enabled us to do things differently than we used to do before. It also affected how we invest our money. First, we started to invest in Cryptocurrency some years back and now there is a trend to invest in NFTs. We can see from some time that the hype of investing in NFT is growing too much. It is becoming the new normal to invest in NFT.
Why people are so much curious to invest in NFT and what is NFT? Let us find that out together.
What is NFT?
NFT stands for non-fungible token. It means that it can’t be copied and it will always be unique. NFTs work on the same principle as cryptocurrency which is blockchain, hence it provides good security. Now what happens is that if you make some digital object say an audio file, you link that audio file to this non-fungible token making them unique and as it works on the blockchain it will record you as the owner of that audio file. Once you float that audio file on the NFT market it can be bought and sold like you buy or sell crypto.
As it works on the blockchain the ownership remains intact because no data on the blockchain record can be modified once created, so it will give the entire list of people who have ever bought that same NFT and it will also tell the current owner of the NFT. If you use any NFT Tracker online to track NFT, it will give you the details of the current owner and all the previous owners.
As we have seen the basics of NFT, now move to the next part why people are investing in NFT.
Why do people invest in NFT?
- The main reason is that it is unique. As it is based on the blockchain network, it is impossible to change the data of any published NFT which makes them unique. If you buy or sell any NFT you can see all the details of the owner from the day it has been published on the NFT market.
- Next is that it can be very rare which increases the price of the NFT. For example, if someone makes the NFT of Monalisa’s painting it can be very very rare. The price of the NFT will increase tremendously once floated in the market. And at some point, you are owning that Monalisa NFT you can also say that you are holding one of the rarest pieces of the object in the world. Hence if you have a rare item its value is high in both terms of social status and monetary wise.
- Every NFT is traded in the whole part. Like if you want to buy any NFT you have to buy it as a whole, whereas you used to buy crypto in small fractions.
How can you buy NFT?
Till now we have talked all about whats and hows about NFT. Now let’s see how you can buy NFT.
- The first step is that you have to make an account on Crypto Exchange to buy and sell cryptocurrency because you can buy NFT using Crypto only.
- Next, you have to buy crypto which is applicable to buy NFT, most of the NFT can be bought from Etherium.
- Then you have to set up a digital wallet. It will be used to hold NFT. It is like a locker where you want to put your stuff.
- After that, you have to set up an account on the NFTmarketplacee. NFT marketplace is the palace from where you can buy NFT.
- The last step is now you can buy NFT using cryptocurrency. There are two ways by which you can buy NFT first is the Gas Fee, it’s like some charge for buying an NFT and the other is using the bidding method. The methods depend on the sell how they want to sell the NFT.
NFTs are a great piece of instrument for investment. All you have to do is to study well about NFTs before you start buying them. Once you have the knowledge you can trade in them very easily. I hope this article might have helped you.