What are the 3 types of NFTs? How exactly do NFTs work? How do you make money with NFTs? Are NFTs a good investment? Why are people buying NFTs? What is NFT in simple words? All these questions will be answered in this video and don’t forget to subscribe!
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❓ So, what is NFT?
NFT stands for Non-Fungible Token, which simply means Non-exchangeable token. Let’s put it simply. It all starts with a blockchain – a system that records information in a way that’s impossible to hack, change or cheat. This is a system that powers cryptocurrencies like Bitcoin and NFTs as well, and this system is what makes the latter non-fungible. Every NFT is essentially an element of the blockchain, a unique token, that just can’t be replicated in the same way.
Yes, we have virtually thousands of different digital assets that we refer to as NFTs, but technically they are not what NFTs are.
⭐ Why are NFTs popular?:
Pictures of funny-looking animals, music albums, or even a celebrity’s tweet- all of this form a neat little package that makes NFTs more desirable. After all, nobody wants to buy literally nothing, but if we are talking art – there will be takers.
Even though this art is not unique. We’re on the 2022 internet, after all, anyone could right-click a digital picture and get a copy, right?
This is a very good question, but proponents of NFTs have a rebuttal. After all, NFTs are just that – non-fungible, non-replaceable. Rare. Artificial scarcity is the name of the game and NFTs are crazy good at playing it. Since each NFT is a unique string of digits, associated with a more or less unique image, it creates the feeling of it being one of a kind; desirable for collectors.
The kind of people that, for example, would form a “Bored Ape Yacht Club” – an exclusive community for ten thousand owners of a specific NFT lineup. The entrance fee for this club and the price for a single NFT is 0.08 ETH or about 150 bucks at the time of recording. The scarcity and desire to belong make NFTs valuable, to the point that a lot of people now want to know how to make NFTs. This popularity also allows NFTs to be sold for astronomical prices. But do not be confused, the value of NFT is collectively agreed on by the community, and isn’t tied to any stable parameter such as the quality of the art or the amount of energy required to mint an NFT.
🚫 The danger of NFTs:
So far, I’ve focused on getting NFTs explained. But now I need to break some crypto news to you. Right now, NFTs are used for some shady stuff. There are so many cases, that even the FBI is launching a cryptocurrency investigation team, which will also investigate NFTs. They have a reason to: in the second half of 2021 alone, cryptocurrencies tied to money laundering worth over 2.5 million dollars were used to buy NFTs. Besides that, a quarter of a million dollars used to purchase NFTs belonged to the wallets of people under international sanctions.
Scams are not rare when NFTs are concerned either. Yes, hacking the blockchain to steal people’s NFT is downright impossible, but if you remember our previous explainer video – Phishing attacks are on the rise. Quite recently, two hundred and fifty-four NFTs were stolen from the OpenSea trading platform through phishing. Those attacks are not even rare, OpenSea was raided multiple times by scammers abusing outdated contacts and using poisoned tokens – malware disguised as NFTs.
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00:00 Intro
0:38 What are NFTs?
2:00 Why are NFTs popular?
2:43 What is the danger of NFTs?
5:37 Is there a positive application for NFTs?
6:22 Conclusion
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