What is NFT, what is it used for?

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6 Feb 2024

What is NFT, what is it used for?

Im not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice.  I does not offer advisory services.

First, let's start by discussing what NFTs are, when they emerged, and what purpose they serve.

What is NFT?

NFT, short for Non-Fungible Token, is a term used to describe unique digital assets verified using blockchain technology. NFTs represent digital assets that are one-of-a-kind and are created using blockchain technology, such as Ethereum.
NFTs are used to authenticate ownership, value, and uniqueness of digital assets. Since they are built on blockchain networks like Ethereum, ownership and value of NFTs are stored on the blockchain. NFTs can represent various digital items including artworks, gaming characters, music tracks, video games, trademarks, digital collections, and much more.
In brief, Non-Fungible Tokens (NFTs) are unique digital items that are one-of-a-kind or part of a limited collection of virtual objects in the art world. An NFT can be a picture, a photograph, a song, video clips, game items, and even tweets (or whatever they call these days). They can be created by anyone, from a random guy who made a funny video a few years ago to NBA (NBA Top Shot collection).

When described in this way, NFTs, which seem similar to cryptocurrencies, can serve various purposes just like cryptocurrencies.

What is the Difference Between NFTs and Cryptocurrency?

Similarities

Both NFTs and cryptocurrencies are built and created using blockchain technology.
They are both part of the DeFi world and attract the same trader pool.
Cryptocurrencies and NFTs are traceable, difficult to hack, and resistant to fraud code pieces.

Are they the same thing?
Simple answer is NO!.
Differences

Cryptocurrencies are fungible. You can exchange them, and the value remains the same.
NFTs are unique and therefore non-fungible. They represent rare items that can be valuable digital assets.
Cryptocurrency is essentially ordinary money you use to buy NFTs.
The value of cryptocurrency is entirely economic. The value of NFTs can be aesthetic, emotional, etc.

So, what is used for?

The most important function of NFT is to enable ownership and trading of digital assets. The best way to prove that you are the sole owner of something valuable in the digital realm could be through NFT. NFT confirms that a digital asset is one-of-a-kind and sets it apart from others, making it a unique asset in the digital world.
NFT also allows you to invest in digital assets. By designing and selling a digital product that you believe is valuable and belongs to you as an NFT, you can increase your cryptocurrency balance. Additionally, since a certain amount of money is transferred to the creator of the valuable item with each sale, NFT provides income to artists.
Lastly, it helps you create a new culture in the digital world. With NFT, you can experience new aspects in various fields such as art, games, music, and collections, and interact with other people. With NFT, you can own assets in the virtual world called the Metaverse and use them as you wish.

Should we buy NFT?

So should you invest in NFTs? That depends on whether the items they represent are authentic, hold value, and stand to gain from being tokenized.

Investing in NFTs has just as many benefits as downsides. In general, NFTs should be purchased if the tokenized asset has an established market and interests you—otherwise, it's unlikely the NFT will experience price appreciation and you will be happy owning it following your purchase.

Accessibility and Contact:
If you wish to learn more, share your thoughts and suggestions, or simply engage in conversation, feel free to reach out to me through the following channels:
Twitter: khubatt.apt
Discord: khubatt

Reference:

NFT (Non-Fungible Token) Nedir, Ne İşe Yarar? | Gedik Yatırım

endeksa.com/tr/blog/yazi/metaverse-arsa-nedir-ve-nasil-kullanilir

NFT Nedir? - Changelly'den Yeni Başlayanlar İçin NFT Kılavuzu

NFT nedir? Nasıl üretilir ve nasıl satın alınır? | ING