Understanding Nfts In 6 Questions
NFT, three letters that we hear more and more about. Find out what an NFT is used for, how it is secured and whether you should invest in it. A simple and clear approach to find your way around.
What is an NFT?
A Non Fungible Token (NFT) is an object with unique characteristics that cannot be replaced by another.
For example, a bag of apples is fungible and can be exchanged for another bag of apples. Euros are interchangeable with other Euros...
A work of art is non-fungible because it has unique characteristics of color, shape, texture or material. Even if a copy can be made.
What is the purpose of an NFT?
Currently, an NFT is used to authenticate the unique owner of a digital artwork, without having exclusive use. Other Internet users can freely save and have the image on their computer and use it as wallpaper for example.
An NFT can also have other uses that we don't really talk about yet. It can authenticate a document or permanently record transactions related to a digital creation.
How is an NFT secured?
The ownership of an NFT is secured by the use of Blockchain technology like cryptocurrencies. Besides, NFTs are considered by specialists as crypto-currencies.
What is the future for NFTs?
It is difficult to predict with certainty whether NFTs will be around for the next five years or for the next few decades.
Whether a new use or a new technology will turn into a fad or a profound change of habit remains an enigma. Even the Internet took years to take off...
What is certain is that the ability to authenticate a document or to know with certainty the owner of an asset is an old and permanent need. NFTs meet this need.
Should I invest in NFTs?
The creators of digital artworks: photos, graphic creation, fashion, design, video games... become the ambassadors of this technology. They find there new outlets for their works and a way to authenticate their creation.
The media often headlines about a famous artist or a renowned sportsman who has just invested in an NFT backed by a work.
Millions of dollars circulate and, like any new product, this creates a buzz and questions: why not me?
Apart from the fact that investing in NFTs involves the same risks as investing in a work of art, you must first spend time learning about the general operation of the transactions:
- Buying process on a specialized platform,
- Having a portfolio of crypto-currencies, necessary for this purchase.
- But also know where to store your NFTs to protect them...
Due to their very nature, NFTs are a risky investment. They are open to sophisticated investors wishing to diversify their assets.
Can NFTs be used outside of digital artworks?
We can indeed imagine that NFTs could be used to authenticate or secure many uses: secure a medical file, transfer real estate ownership, improve logistical tracking by following a product from production to delivery, and even serve as after-sales service.
Anything that needs to be authenticated and tracked.