Understanding NFT in A Simple Way
NFT stands for Non-Fungible Tokens, digital assets on the blockchain network that have unique identification codes and metadata and are different from each other. Like stocks, NFTs also have fundamentals or reasons behind why we should buy NFTs. If the shares being traded are shares, then crypto trades coins, it is different for NFTs that are traded are images. What actually sells from this NFT is the utility and the roadmap, not the pictures.
NFT Has A Way of Working
Before discussing how NFT works, we need to first know what Blockchain is. Blockchain is a new technology developed for digital data storage systems. The product of all NFTs is in the form of a contract called a smart contract. This smart contract cannot be hacked. We buy a token in the form of an image, then this token is connected to a smart contract and the ownership is 1:1. What is being traded is the smart contract. To make it easier to imagine, let’s say we use the example of Feed on Instagram. If we have 9 photo grids on Instagram, we have 9 smart contracts.
Pay Attention to Some Important Things So As Not To Harm and Be Harmed
One of the keys to always remember is “Don’t trust anyone in the NFT.” The reason is because we don’t know who the original owner of each NFT is. This has the potential to lead to fraud. Then the second key is not to feel afraid of being left behind by a trend or the term Fear of Missing Out (FOMO). We can fall into a pit if we just follow what is currently happening around us without trying to really understand and analyze it ourselves. The third and most important key is not to be greedy. Maybe we hope to make big profits, but if we are not good at making decisions, we can miss out on better opportunities.