Non-fungible tokens or NFTs are digital assets have become popular lately. The sales of NFTs have surged manifold in the recent times, with many Indian celebrities Amitabh Bachchan, Vishal Malhotra, Sunny Leone and many others launching these digital tokens of their own. These digital assets are slowly making their way to the Indian market, and have become especially popular among investors. An NFT is a unique crypto token represented on a distributed ledger. However, their market is still relatively small, with young people being mostly drawn towards crypto coins. However, NFTs are currently being portrayed as the digital solution to collectibles that are one of a kind. Read on to find out if you should buy NFTs this Dhanteras.
What is an NFT?
To put in simple words, an NFT is a one-of-a-kind digital asset that represents real world objects such as music, art, in-game articles, videos or even social media posts. Being non-fungible, NFTs can not be interchanged with anything else as it is unique and irreplaceable. In recent times, NFTs have become a popular way to sell and buy digital artwork. However, these digital tokens have been around since 2014.
But what makes NFTs unique? Data from the internet can be stored easily, one may argue. However, even though one can get a free copy of one item in an NFT, the unique properties will be surely missed out on. This is where the non-fungible part comes into play. To put in a simple manner, millions of copies of Van Gogh’s painting The Starry Night is available all across the world. But the original one, kept in the Pushkin Museum in Moscow, still holds the same value.
How do NFTs Work?
Traditional artwork or things similar to it have value to them because they are unique but digital art can be copied millions of times, without any restrictions. This is where NFTs come in and ‘tokenise’ them to create a digital ownership, which can be then bought and sold for an appropriate value. NFTs exist on a blockchain (a distributed public ledger that keeps track of transactions), especially digital blockchains.
NFTs are created from digital works, which represent items like art, GIFs, videos, music, collectibles and even tweets. The first ever tweet by Twitter founder Jack Dorsey was converted to an NFT and sold for more than $2.9 million, according to Forbes.
Should you Buy NFTs this Dhanteras?
NFT or non-fungible tokens are the new talk of the town but many sceptics worry that these digital assets are a bubble waiting to burst any time. So, before you buy NFTs this Dhanteras, you should take a step back and think, because this depends on a lot of factors.
According to a Forbes report quoting Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council, NFTs involve a lot of risks and their future is not certain. “We don’t yet have a lot of history to judge their performance. Since NFTs are so new, it may be worth investing small amounts to try it out for now,” she tells Forbes.
NFTs are by and large a personal decision. You can buy them for as low as Rs 10 or may even spend lakhs of rupees on them. You may even go for it if it suits you personal taste. However, if you are investing in NFTs, it is advisable to keep track on the recent market trends before you buy them on Dhanteras.