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Non-Fungible Tokens (NFTs): What Are They And How Do They Work?

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Non-Fungible Tokens (NFTs)

Non-Fungible Tokens (NFTs): What Are They And How Do They Work?

Overview

Non-Fungible Tokens (NFTs) and other associated crypto and blockchain projects witnessed a massive rise in 2020. NFTs data project (NonFungible.com) reported that the sales of NFTs came close to $1 million in September 2020. The advent of blockchain technology and cryptocurrency has enabled the development of many projects. One of such projects is the NFTs.

There has been massive media buzz around these non-fungible tokens. In this post, we shall explore the concept of NFTs, what they are, and how they work. Whether or not you have heard about NFTs, this post will hold you by the hand and guide you through.

Also Read: Top DeFi Projects to look out for in 2021

What are Non Fungible Tokens (NFTs)?

They are cryptographic tokens that are indivisible and unique and are used to create digital scarcity and verify ownership. As the name says, non-fungible tokens cannot be interchanged. Like every other cryptocurrency, they are built on the blockchain but not interchangeable like other cryptos. No two NFTs are the same, unlike other cryptocurrencies that have identical coins/tokens.

Non-Fungible Tokens (NFTs)

These non-fungible tokens can be used to represent artworks, collectibles, real-world assets, in-game items, etc. You cannot interchange one NFT for another, and the whole cannot be broken down into smaller parts. These NFTs are mainly built on the Ethereum blockchain using the ERC-20 token standard.

Today, we have quite a number of non-fungible token projects doing greatly in the crypto space. We shall look into some of these projects later in this post. These NFTs became popular when CryptoKitties went viral and raised $12.5 million investment.

Characteristics of Non-Fungible Tokens

Here are some of the primary characteristics of non-fungible tokens:

  • They are rare

The value of non-fungible tokens (NFTs) comes from the fact that they are scarce. Developers can create any amount of non-fungible tokens, but they often limit the tokens to increase scarcity.

  • Indivisibility 

Non-fungible tokens cannot be divided into smaller fractional units. You can either buy a digital art piece, or you don’t buy it at all.

  • Uniqueness 

Non-fungible tokens are unique as no two NFTs are the same. All NFTs have a permanent information tab that keeps a record of their uniqueness. You can see this information as the certificate of authenticity.

Difference Between Fungible And Non-Fungible Tokens (NFTs)

A fungible crypto asset is an asset that is interchangeable with any other unit of the same asset. For example, one ETH is the same as any other ETH in circulation. Fungible tokens are also divisible; hence they can be broken down into smaller units that share the same properties. In essence, fungible tokens are indistinguishable from the other. These features make it possible for an asset to be used as a payment mechanism.

On the other hand, non-fungible crypto assets are indivisible and unique. Although all NFTs are built on smart contracts like ETH and DAI, these contracts contain specific information that makes each NFT different. Therefore, you cannot interchange one non-fungible token for another. Also, the whole cannot be broken down into a fraction of units.

Advantages of Non-Fungible Tokens (NFTs)

These non-fungible tokens bring a new dimension to digital interaction, and they have three major advantages.

  1. NFTs are transferable 

They are bought and sold on a special marketplace, and their value depends on their uniqueness.

  1. NFTs preserve ownership rights.

NFTs use decentralized platforms where no owner can alter the data once it has been committed to the system.

  1. They are authentic

Non-fungible tokens are powered by blockchain technology. Therefore, you have confidence that the NFT is genuine. It is highly improbable for someone to create fake NFTs using a decentralized, immutable ledger.

Read: Is Bitcoin the new Institutional Grade Safe-Haven Asset?

Non-Fungible Token Projects

Let us consider some of the trending non-fungible token projects so that you can have a better picture of what we have been saying. These non-fungible crypto assets projects include the following:

  • Ethernity

Ethernity is a project founded by long-standing crypto investor Nick Rose Ntertsas. The project is dedicated to exploring digital art using non-fungible tokens (NFTs). By working closely with leaders in the blockchain, music, and entertainment worlds, Ethernity aims to NFT-based art to the mainstream. They hope to use the proceeds for philanthropic purposes. Ethernity is one of the leading non-fungible token projects in the market.

  • KnownOrigin

KnownOrigin is also one of the best non-fungible token projects. The platform allows artists to showcase and sell their digital works and other collectibles. Before now, buying artworks has very high entry barriers for everyday people. It is always difficult to prove the authenticity of artwork without the help of an art expert. KnownOrigin helps users easily identify an artwork’s authentic owner, thus having confidence in their purchase.

  • Cryptograph

Cryptograph is also one of the best non-fungible token projects you can find out there. Recently, Paris Hilton sold her digital painting of a cat for 40 ETH through Cryptograph. The platform allows users to sell collectibles such as famous drawings, diagrams, or paintings. Celebrities like Ashley Greene and Seth Greene have posted their work on the platform for auction.

Non Fungible token Uses Cases.

Today, we have several non-fungible tokens uses cases. CryproKitties is arguably the most popular application of non-fungible tokens. The application allows for the buying, selling, and breeding of adorable digital cats. The project was launched on November 28, 2017. Within a space of two weeks, it had more than 150,000 users with over $15 million in transactions. The platform became a viral sensation when a single CryptoKitty was sold for $170,000. It attracted a new audience of gamers to Ethereum with more global mainstream attention.

Other non-fungible token use cases include the following:

  • The creation of crypto or digital collectibles
  • They can be used to manage ownership of digital arts while also allowing artists to retain their copyright.
  • Non-fungible tokens (NFTs) can be used to create a digital system that allows users to control their data from a single point.
  • It allows for the fractional ownership of high-value items like real estate.

Conclusion

The non-fungible tokens (NFTs) space is still in its infancy, and there is no knowing which project to bank on. You should see new platforms edge out some of the current ones to lead the NFT projects in 2021. Currently, NFT is gradually abandoning gaming and CryptoKitties and moving on to DeFi, digital identity, and painting.

 

 

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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