Physical money and cryptocurrencies are ‘fungible’. It means they can be traded or exchanged for one another or buy any goods or services. Generally, NFTs are created using the same kind of programming as cryptocurrency. But this is where the similarity between those two ends. NFT stands for Non-Fungible Tokens. They are impossible to be exchanged because a digital signature protects each NFT. In this article, we will cover all the details related to non-fungible tokens, what those are, why these are popular, and how to invest in NFTs in India.
A Non-Fungible Token is a non-interchangeable unique digital asset used for one-of-a-kind digital artworks, music, or other collectibles which cannot be replicated. If you have an NFT of such kind, it does not indicate that you become the asset owner. Instead, you are given access to the original file’s location. The file is present over the internet and you can access it virtually anywhere and whenever you want.
Consider a situation where there are two artworks, one being the original and the other being the duplicate look-alike. Compared to a duplicate, the original artwork has more value. Similarly, an NFT cannot be duplicated, and any imitation of the asset will not hold any worth. The original artwork can only be owned by one person.
In a similar fashion to other cryptocurrencies, NFT works on blockchain technology to store and retrieve databases. The technology certifies the digital asset as a unique and one-of-a-kind token and then stores it in the distributed online account. Rare NFTs attract million-dollar buyers. The huge investments people make in buying NFTs have made it a huge success. NFTs can be used as an alternative for digital transactions.
NFTs are unique. Physical artwork and documents can easily be destroyed. However, NFTs can be stored indefinitely. Digital certificates and signatures ensure their security. This benefit provided by an NFT attracted a large audience around the world. The concept of NFT is still new and unknown to the majority of people in India. In the future, Indian artists can use NFTs to gain royalty for their artwork and acquire copyrights of the work.
As NFT is a new technology in the market, it will eventually take time to get the answer for this question. You can consider investing in a genuine item of art that is available in digital form. Another reason why people invest in NFT is due to its unambiguous nature, they believe its value will rise over time.
Always remember that the world is full of valuable collectors. Digital artwork is catching the eye of many and investors are willing to pay in millions to buy an original artwork that can become a statement piece. The progress of NFTs is slow and eventually can become one of the ways for digital transactions in the near future.
Also read: Should I invest in Cryptocurrency
The second step is to fund the digital wallet with cryptocurrency. In general, Ethereum (ETH) is the most accepted cryptocurrency for NFT investment. The native token for WazirX is “WRX”. The price of 1 WRX is estimated at Rs. 87. Currently, NFTs on WazirX have a fixed price. You can choose the NFT you wish to purchase by paying in WRX tokens.
- NFT will always be valued based on how much someone is willing to pay for it.
- The value of NFT increases slowly with time.
- Only consider buying an NFT after proper research. Investing in NFT is similar to another kind of investment in the market.
- Beware of fraud NFTs and malicious traders.
- Always know what the value of NFT in the future will be if you wish to buy.