What You Need To Know About Non-Fungible Tokens (NFTs)

What is an NFT?

NFTs (non-fungible tokens) are digital representations of real-world assets. They are stored on a blockchain and can be used in games, but have many other uses as well. In their simplest form, they're just an ID that represents something else. But they can also have additional information encoded into them—like the owner's name or photo (or both).

NFTs are usually bought or sold on marketplaces like OpenSea or Rare Bits. You can use these websites to buy your own NFTs or sell existing ones so you can trade them with others.

An example of how NFTs might work: Say you own an original painting by Picasso worth $1 million dollars! Of course, this is crazy because no one could ever expect anyone to pay that much for a piece of art, let alone a single person owning all the rights to it and being able to sell it themselves at will! But if you wanted someone else who wanted this painting badly enough could buy it from YOU directly via an auction where YOU get paid immediately instead making them wait until after someone buys YOUR piece through THEIR store... In this case, when someone wins an auction for YOUR painting it means only ONE person gets exactly what THEY want without having different versions sold elsewhere which may be cheaper or higher-quality versions depending not only on whether someone wants yours specifically but also on what kind of deal they're willing to negotiate with YOU directly."

Types of NFTs

The most common NFTs are digital collectibles, like the CryptoKitties that we’ve all heard about and seen. These are made possible by blockchain technology, which allows for the creation of unique digital assets on a decentralized network. The purpose of these tokens is to provide ownership over an object without needing to store it physically and without any risk that someone will be able to copy it (as they can with normal currencies).

Physical NFTs

Physical NFTs are a rarity and can be used as collectibles, gifts, investments, or stores of value.

Many people have heard of crypto-collectibles like CryptoKitties that essentially function as digital art pieces. However, there are also physical versions of these assets that you can hold in your hand and display.

These physical NFTs add another layer to the game by making it feel more authentic and tangible than a purely digital asset could ever be.

Digital NFTs

NFTs are digital, so you can store the NFT on your computer or mobile device.

Digital NFTs can be used for many different things: art, collectibles, and even currency.

Where are NFTs stored?

NFTs are stored in a digital wallet or smart contract. Some NFTs also exist on decentralized exchanges and dApps.

Who owns the original artwork after it is sold?

The answer to this question depends on whether you are talking about digital or physical assets. With respect to digital assets, the person who owns the original artwork owns it just as they would if they owned any other digital content (e.g., an mp3 file).

However, with respect to physical items like paintings, sculptures, and so forth, there is another layer of complexity as ownership can be split between multiple parties:

• The creator of the artwork owns part of it. In this case, we're talking about artists who create artworks for sale in a gallery or online auction house (like Artsy). They retain ownership over their work until someone buys it from them for resale purposes. Artists will generally retain some rights over their creations in order to prevent others from producing copies without permission—rights which are frequently outlined explicitly in contracts signed by both parties prior to any sale taking place.*
• The seller owns another portion of the said piece because they have purchased them from an artist and agreed upon certain terms under which they may resell them later down line.* And finally
• You as a buyer own some portion as well! As was mentioned above regarding contracts between sellers and buyers: these contracts often stipulate certain terms under which both parties agree upon how long one side has possession over the said piece before transferring full control over those same pieces back over into the other's hands again (e.g., 60 days after purchase).

In what ways can you monetize NFTs?

There are many potential ways to monetize NFTs. The first, and most obvious, is to use them as game items. These can be sold in games or used for in-game transactions if the NFT has value within that game. Other possibilities include selling them on social media platforms and auction sites like eBay. You could also use them as proof of ownership so artists can sell their works online or offline at art galleries, auctions, or even physical stores (we’ve all seen those comic books with holographic stickers).

How do I sell an NFT?

To sell your NFT, you will need to transfer it to a decentralized platform. To do so, you'll need to use a smart contract—a computer protocol that facilitates the trading of assets on blockchains.

Once your NFT is on the blockchain, anyone who wants to purchase it can do so with cryptocurrency or tokens. You can also sell an NFT for its current market price if you have access to an exchange where people are trading them (more on this later).

You can also set up a fixed price for your item and wait for someone else who wants it at that price level before making any transactions happen. This is similar in concept to putting something up for sale and waiting for customers; however, because this type of transaction occurs within an automated system rather than between two people directly, it's considered safer from getting scammed!

How do I buy an NFT?

There are five different ways to buy an NFT:

• From a marketplace. This is the easiest way to buy an NFT. In fact, most of them have built-in marketplaces where you can pick out whatever item you want and buy it right away. Some marketplaces only allow users who have already bought something in the past (often referred to as "established users") to sell their own items on their platform; others let anyone post their own listings for free or for a small fee. There are also companies that act like marketplaces but aren't actually marketed at all—they're just places where you can find sellers who will negotiate with you directly over price and payment methods (like eBay).
• From a secondary market (also called secondary sales or resales). Sometimes people don't want to deal with selling themselves directly through an auction site or marketplace; instead, they'll list their NFTs on other websites that handle buying and selling transactions between two parties without taking any fees from either party aside from whatever fees may be imposed by payment processors like PayPal or Stripe.*

There is a very active and growing market for NFTs

NFTs are a new form of digital asset. They're not quite the same as cryptocurrencies like Bitcoin or Ethereum, but they don't feel that much different either. In fact, they work in a similar way: they're stored in a digital wallet and traded on a blockchain.

But what's special about NFTs is that they can represent any type of physical or intellectual property, such as artwork, stickers, and even characters from video games. For example, one of the most popular games right now is Fortnite—you can buy Fortnite skins and dance moves which are then tied to your account so you can use them across all platforms where you play Fortnite (PC/Mac/Mobile). These items are essentially tokens for use within their respective platform only—and though this may seem to limit at first glance because these items aren't transferable between platforms or players who don't own them yet--there's no limit as long as there's demand!