What is NFT? Find out the special features that make NFT so hot

If DeFi makes 2020 brilliant, which name is expected to become the dominant crypto trend in 2021?

What is NFT? Overview of the current NFT ecosystem

NFT is an abbreviation for “Non-fungible token”, which is a unique cryptocurrency that cannot be replaced by another NFT. NFTs typically represent a digital asset, or a tokenized asset from the real world. 

In the early days of NFT associated with the name CryptoKitties, it made waves in the market when it clogged the Ethereum network in late 2017. Now after more than 3 years of growth, the NFT ecosystem has gradually improved with many pieces. diverse grafting.

Is NFT like a coin?

When you hold NFTs and coins, you first own two assets on-chain. In other words, NFT and coin share the same characteristics of blockchain: decentralization and anonymity. 

In addition, you can store NFT on blockchain wallet, take out and buy and sell similar to coins. The NFT market has now developed with many marketplaces - marketplaces with all kinds of things for us to search and collect.

What is the difference between NFT and coin?

If investing in coins is similar to trading Forex or stocks, playing NFT is likened to collecting antiques and rare items in the 4.0 era.

Coin trading has good liquidity, but 1 coin is not unique. The ETH in my wallet is the same as the ETH in your wallet, may vary in quantity. On the contrary, NFT has a unique rarity. A "virtual moose" in CryptoKitties is unique, each with a unique, non-duplicate identity. The key is that NFT is indivisible and non-fungible. – the characteristic that gives it its unique value.

NFTs are collected with default rarity, accumulating value over time with the expectation that the next transaction will cost more than the previous one. Because, the essence of collecting lies in the taste and aesthetic sense of each individual. Since then it has had a greater influence on the tastes of an NFT playing community. A person may be willing to pay close to $600,000 for a virtual Nyan, or $1.5 million for nine virtual plots of land on Axie Infinity.

Potential 

– No coin has ever generated a record profit of 100,000% in 3 days like NFT the “Trump” picture from Hashmasks. The scarcity of unconventional NFTs has incredible upside potential.

– Blockchain technology that enables collectibles 4.0 is now more transparent and convenient. You can trace the origin and confirm the owner of a billion-dollar painting with just a few simple clicks. Even its transaction history is recorded on-chain. The element of counterfeit goods is completely eliminated.

– The tokenization of on-chain assets opens up the possibility of safe, secure and more efficient storage than traditional collectors. The proof is that reputable auction houses like  Christie's are offering the first NFTs. On top of that, the benefits of cross-border payments in crypto are lower transaction costs and shorter wait times than traditional methods.

Restrictions 

– The most obvious weakness of NFT is poor liquidity. The total trading volume of NFT so far is only about 300 million USD. By comparison, this is only 0.1% of the cryptocurrency's spot volume in … 1 day.

– The valuation is quite emotional. Europe is also because the nature of the collection is due to individual preferences and feelings, so there will be a scene where crazy fans are willing to pay high prices, while August fans set low prices. That is only part of the value of an NFT.

Steps to buy and sell NFT

1. First, you must have a crypto wallet to buy and store NFT. Of course, the wallet must have money.

2. Connect the wallet to the NFT selling platform you want to buy. When paying, keep an eye on transaction fees because many times, the gas money on Ethereum is higher than the beast you are about to receive.

3. These tokens will return to your wallet. With crypto wallets that integrate the NFT exchange Dapp, you can set the price to place sell orders immediately, or accumulate until the time is ripe.

In the following articles, we will dig deeper into how to participate in NFT, featured projects, and share from the Crypto Fox News team's real-life experiences. From how to make money to how to limit losing money from NFT. Let's look forward to it!

Aug 29, 2022