What is an NFT

An NFT (non-fungible token) is a unique digital item stored on a blockchain. NFTs can represent almost anything, and serve as digital record of ownership. NFTs operate on blockchain technology.Learn more here

NFTs are unique digital collectibles like artwork, music, or videos. You can buy and sell them online by often using cryptocurrency. Even though they've been around for a while, NFTs are becoming more popular, especially for digital art. The market for NFTs is huge and is close to being as valuable as the traditional art market. One of the key things that makes NFTs valuable is that they are rare or one-of-a-kind, unlike most digital things which can be easily copied. This rarity could make them more valuable, similar to other collectible items.Learn more here

How is an NFT different from a Cryptocurrency?

NFTs and cryptocurrencies share similarities, such as their use in Web3 and their representation of digital assets. However, they differ significantly in concept and use. NFTs (Non-fungible Tokens) are unique and irreplaceable, similar to trading cards; for example, you can't trade a Michael Jordan rookie card for a LeBron James rookie card because they represent different things. In contrast, cryptocurrencies are fungible, meaning one Bitcoin is interchangeable with another, much like how all $10 bills have the same value.

What's their Use Case?

• Cryptocurrenciesare often used as a digital currency for transactions and potential investment. You can use Bitcoin to buy a coffee (if the merchant accepts it) or hold onto when trading it hoping it goes up in value.
• NFTsrepresent ownership of digital or physical assets. NFTs can be digital art, music, in-game items, or even real-world things like property.

Keep in mind that both complement each other and has its own importance in the blockchain. For example, you might need cryptocurrency to buy an NFT, or sell your NFT to earn some cryptocurrency. Both utilizes the blockchain technology to track ownership.

When did NFT became popular?

NFTs gained widespread recognition in 2017, largely due to the launch of CryptoKitties, a blockchain-based game that allowed players to collect, breed, and trade virtual cats. While earlier concepts like colored coins existed around 2012, the user-friendly features of the Ethereum blockchain were pivotal in facilitating the creation, storage, and trading of NFTs, driving the NFT boom that year.

In the Philippines, the NFT boom has primarily focused on digital art and gaming. NFTs offered talented artists a chance for international recognition by providing a secure way to prove ownership of their works and potentially earn a living. Additionally, the play-to-earn model of games like Axie Infinity surged during the pandemic, appealing to Filipinos seeking income amid economic challenges. The ability to own and trade valuable in-game assets has paved the way for future play-to-earn games and increased exposure to blockchain technology in the country.

Different types of NFTs

Blockchains are distributed public ledgers that record transactions and are where NFTs are found. Most likely, you are most familiar with blockchain technology as the backbone that enables cryptocurrencies. In particular, NFTs are generally maintained on the Ethereum network, though they can also be maintained on other networks.

An NFT is produced, or minted, using digital representations of both material and immaterial objects.

• Art NFTs:These are the most common, representing digital artwork ranging from single-edition pieces to collections with varying degrees of rarity.
• Collectible NFTs:Think of virtual trading cards. They include profile pictures (PFPs) such as those from the popular Bored Ape Yacht Club or Cryptopunks collections, as well as other collectibles like memes or virtual sports highlights.
• Gaming NFTs:In play-to-earn games, NFTs are frequently used to purchase in-game goods, virtual land, or characters. These NFTs have in-game uses and can be exchanged for real money.

And a few more including:

• Utility NFTs
• Virtual Real Estate NFTs
• Domain NFTs
• Music NFTs
• Ticketing NFTs
• Charitable NFTs
• Real-world Asset NFTs
• Decentralized Finance (DeFi) NFTs

These are but the few examples of NFTs that can be found in different marketplaces. To find out more on what gives NFT their value and how its economy work, move to the next topic.