Get to Know What NFT is and How it Works

Maybe lately you’ve often heard the term NFT which is popular on social media. However, do you know what NFT actually is? In order not to be misinformed, let’s discuss NFT and how it works.

Quoting from CNN, NFT or the abbreviation of Non-Fungible Token is a digital asset in the form of works of art, such as photos, music, videos, sounds, to games.

If you are an artist, you can sell your art in NFT. The artwork that you upload will also get a certificate, so no one can imitate it.

The existence of blockchain technology in NFTs will guarantee that works of art that are sold by an artist cannot be claimed freely by other people. However, in order to buy and sell NFTs, you must own cryptocurrency.

What are NFT?

NFT or Non-Fungible Token is arguably a derivative of cryptocurrency. However, between NFT and crypto have different goals and ways of working.

In crypto, assets can be traded because they have equivalent exchange rates. As for NFTs, the value is never the same, so they cannot be traded with other NFTs.

Because of its unequal value, many people think that NFTs are not a sure investment. The thing that makes NFTs so popular is the ownership of these digital assets.

NFT advantages

If it really can’t be traded, maybe you are also wondering what the advantages of this NFT really are. Here’s the review.

1. Exclusive

As previously mentioned, NFTs cannot be traded because they are not equal in value. However, having an NFT means that you own an original and exclusive digital asset. For those of you who are art admirers, you will be happy to have NFT.

Likewise with artists, they can sell their art without worrying that someone will imitate it.

2. Profitable

Indeed, NFT cannot be traded because of its unequal value, but it can still provide your benefits for you. The trick is to sell NFT assets at an auction.

You can sell digital assets that you own at an auction. That way, you will benefit from this NFT.

How to sell works through NFT

If you’re an artist, you might be interested in creating an NFT. You can try to sell your artwork by taking the following steps.

• Create an account on the NFT marketplace.
• You must have crypto assets according to the marketplace policy where you register the NFT.
• Before registering, make sure you register on the right marketplace, OK? Read the instructions and how it works so you don’t go wrong.
• Upload your work and click the sell button. After that, you can follow the steps according to the rules on the marketplace you choose.
• Provide complete information regarding the name of the asset, price, to the cryptocurrency to pay.
• The marketplace will then continue this process and calculate the cost of the Ethereum blockchain network which varies in price.

Choose a definite investment

Even though NFT is on the rise, you also have to understand the risks of this NFT. This is because NFT is full of uncertainties considering that the value of this NFT is determined by the perception or agreement between the seller and the buyer.

Launching from Kompas, NFT also has no legal rules, so if there is loss or fraud, you will not get legal protection.

For you, a beginner investor, it is not recommended to follow this NFT trend. You can try safe and easy investments like mutual funds.

Even though mutual fund profits are not as big as other investments, this investment instrument is quite safe and stable. If you invest regularly, you will definitely get a good profit.