NFTs stand for Non-fungible tokens, and being a beginner, you must be eager to figure out why the NFTs are becoming the latest trend and hot topic over the web. You would already be aware of the fact that you cannot begin your NFTs journey without having proper understanding of them. Knowing just what NFTs stand for is definitely not the reason you are here. Relax and calm down, as this guide will take you through everything required to understand this trending topic.
An important term within the name of this social revolution, Non-fungible, means that a particular thing is original and it cannot be replaced with anything else. In simply words, NFTs are the tokens or smart contracts that represent the authorship of unique items, which include legal documents, digital art, an event’s tickets, music files, videos, and so on. Not all the commodities in this world possess the ability to become an NFT, as they all may not have attributes to stay unique from others. Any time that cannot be used interchangeably for another item can be converted into an NFT.
We believe that you must have got some idea about what NFT actually is.
Continue reading to explore it more!
Important NFT Terms to Know About
Before you step into the NFT-crazed world, it’s essential to know the terminologies you’ll often come across. You need to know about NFT terms so that you can understand the whole concept behind the purchase and trade of NFTs. Sometimes also referred to as NFT slang, a few NFT terms you should be aware of are discussed below!
Airdrop
You may come across this term in the NFT world several times. Airdrop is basically defined as the bonus or free collectables in the world of NFTs. They basically work as a promotional tool to increase the user base of a newly introduced NFT or an existing one. The airdrop NFTs are offered to the loyal holders of NFTs or the people who have participated in the survey and given feedback on social media platforms.
Drop
When an NFT is launched or released, it is referred to as drop. This NFT term is quite popular among the collectors and sellers of NFTs. This NFT slang is also gaining popularity in other fields. Dropping of NFT means that it is available in the market for trade at its floor price.
Flip
The quick purchasing and selling of NFTs is known as flip. The quick trade that occurs in the world of NFTs for the means of profit is described by the NFT term flip. This term not only describes the NFTs that are purchased and sold within a few hours. The NFTs traded in a span of a few days are also referred to with the same term.
Floor Price
The floor price is a term used to describe the base price on which an NFT is dropped in the market. It is the minimum price that needs to be paid to acquire a token. If an NFT achieves fame, its floor price is bound to rise.
Minting
Minting is one of the most noteworthy NFT terms and you need to understand it for entering the world of NFTs. As earlier stated, NFTs are digital assets but anything that is digital cannot be called an NFT. Minting is the process through which a digital asset is converted into a digital asset that is meant to be traded as an NFT.
How Can You Buy an NFT?
As now you are aware of the common NFT slang words, you can move towards understanding the purchase of an NFT. Buying an NFT doesn’t need to be intimidating, as you can follow a few simple steps.
First of all, you need to purchase a cryptocurrency. You can join the marketplace where crypto is sold to purchase Ethereum.
After that, you need to build your cryptocurrency wallet. It is essential to create it, as it is a place where you can manage your digital assets and cryptocurrency.
Once your wallet is created, you need to transfer the purchased cryptocurrency to it for being able to gain control over purchasing NFTs from different marketplaces.
The next step is to join the NFT marketplace and sync your cryptocurrency wallet with it. When you are done doing this purchase, you’ll be allowed to purchase and store your digital assets over it.
How Can You Assess the Value of an NFT?
Creating the value of an NFT is also crucial for beginners to understand. It is the last thing we will be discussing in this blog about NFTs. Just like for trading cryptocurrency, you need to understand the market trends. Similarly, purchasing NFTs should be based on the value you have assessed of them. Assessing their value shouldn’t be a problem, as you can look into the following elements.
Celebrity: The project is limited in supply and created by a celebrity.
Utility: The NFT possesses the capability of outside usage instead of being just a piece of art.
Uniqueness: The NFT is dissimilar to other projects or pieces of art.
You should opt to purchase NFTs that are based on either of the aforementioned elements.
Final Words
Understanding NFTs doesn’t have to be a problem anymore. You can go through this guide given above and enter the NFT-crazed world with full confidence. Surely, you’ll be able to make profits with the trade of NFTs.