Have you made some investment in a cryptocurrency?
You might believe Non-Fungible Tokens (NFTs) to be another version of cryptocurrencies such as Bitcoin and Ethereum. But that is not the case.
Although NFTs are cryptographic assets on a blockchain, they come with unique ID codes and metadata.
Both cryptocurrency and non-fungible tokens have their foundation laid in blockchain technology.
The only difference between cryptocurrency and NFT lies in the 'fungibility' aspect of cryptocurrencies like Ethereum. While an Ethereum coin can be exchanged for another Ethereum coin.
An NFT does not allow this type of transaction. The NFT remains attached to a specific digital asset, and it is entirely irreplaceable.
Therefore, every NFT you will find on the Internet will be different from any other NFT available online. Hence, NFTs cannot be utilized as a mode of commercial transaction like Bitcoin.
The uniqueness of NFTs makes them a practical currency for sharing assets. For example, if you have a work of art that you want to buy online, you can do so by using NFT.
Furthermore, there is absolutely no risk of fraud as each NFT has its unique signature ownership.
One crucial thing to remember is that NFTs do not automatically grant you the copyright or the reproduction right.
If you want to make different versions of the asset that you have bought online via NFT, you will have to purchase the copyright from the asset owner.
Currently, NFTs have become a lucrative option for everyone who wants to buy digital assets.
However, before making any investment in NFTs today, one should understand that the concept behind NFTs is still evolving. So, if you are investing, always buy it from trusted marketplaces.
Pro Advice: Don't buy NFTs just because everyone is buying them. Only buy NFTs if you understand the goods being sold and use them.
Disclaimer: Cryptogurukul has no relationship to these projects, and there is no endorsement or investment advise. Please seek professional advice before taking financial risks.