In plain terms, what is NFT and how can you profit from it?

The very first tweet, cut scenes from Pulp Fiction, an Elon Musk song and, of course, memes – they all exist in NFT format and cost a lot of money. What is it, is it possible to create your own token and how to make money on it and from where does the NFT value come from, to know all that – read the  following article.

What is NFT

An NFT, or Non-Fungible Token, is a unit of account that creates a digital impression of any unique item. Paintings, images, films, music, gifs – in short, any content that claims to be unique in some way – can all be included. They are highly valued by collectors, gamers, and art enthusiasts, and are purchased and sold at auctions.

These same tokens are stored in the so-called blockchain – a huge chain of blocks, each of which contains information. Unlike, for example, servers, where data is stored in one place, these blocks can be located on many devices in various parts of the world.

This type of encryption makes the blockchain very difficult to hack, because at best you will be able to hack just one block of information, and not the entire chain. That is why most of the cryptocurrencies work on the blockchain.

A token is just a record in one of the blocks, and, as a rule, there can be a lot of such records of the same type. For example, each individual bitcoin is an exact copy of another such bitcoin, which makes it possible to compare them with a currency.

An NFT token is a way to transfer unique items from the real world to the blockchain.Each of these tokens is one-of-a-kind, inseparable, and exists only once. Furthermore, the blockchain stores all of the necessary information about it in a secure manner.

When did they appear?

Blockchain and cryptocurrencies have been around for years, but it was NFTs that appeared just a few years ago. In many ways, they owe their popularity to the game CryptoKitties, where you need to grow and breed virtual crypto cats. Hundreds of thousands of dollars can be spent on one of these kittens.

An important role was played by the connection of NFTs with cryptocurrencies, as well as by the fact that during the pandemic, many new non-professional players appeared on the stock markets who wanted to make money.

Where to apply?

Although, as planned, NFT tokens were created as an opportunity for digital content creators to earn money from collectors, gamers, and simply art connoisseurs, now the main direction is the monetization of popularity.

For example, Elon Musk, the founder of Tesla, auctioned his NFT tweet for $1 million. In the end, it was never sold, but received a lot of attention from the online media.

Pokras Lampas was one of the first artists who started selling his paintings in the form of tokens – his painting Transition, which he designed for the Chirkeyskaya HPP, sold for 2 million rubles.

For a long time, the $70 million record was held by the work of digital artist Mike Winkelman in the form of a collaboration of all his paintings over the past 5,000 days.