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NFTs first came into existence in 2014 but the technology never became widely known until 2021 when a little-known artist sold a piece of digital artwork for USD 69 million at an auction. This ignited the massive boom that NFTs are experiencing today.

1. What are NFTs and how do they work?

NFTs is an acronym for Non-Fungible Tokens.

Non-Fungible in the sense that they are unique and cannot be interchanged like fungible assets such as Bitcoin. Let’s take for example if you exchange a Bitcoin to get another, nothing changes, you still get the same Bitcoin back — it’s the opposite in the case of NFTs.

Each NFT has a distinct signature used to designate and verify ownership of assets — there is no two original copy.

NFTs are digital assets that are usually representations of real-world objects such as in-game items, videos, music, collectibles, virtual assets, and arts. These crypto-assets are largely part of the Ethereum network

2. Why does NFT art have value?

Same to physical art, four factors contribute to the value of NFT art  — how expensive it becomes.

 

The first is the “market-driven value”, which depends on the speculated resale value and popularity of the artist. The second is the “subjective value”. It involves the moral statement or political message that is conveyed by the art — how it makes you feel.

Another value determinant of NFT arts is the “objective value”. This involves the experience and technical skill by which it was created. Lastly is the “historical value” the piece of digital art has.

All these factors contribute to how people value NFTs. “The Merge” which sold at an auction for a whopping USD 91.8 million is the most expensive artwork ever.  Each NFT created or minted is unique, and its right can be traced to the owner, and blockchain technology protects this right of ownership.

3. What are NFTs used for?

NFTs can be used to indicate ownership of rare assets which represent real-world items like real estate and artwork.

It’s important to note however that purchasing an NFT that includes the copyright of the original artwork does not mean its copyright is automatically transferred to you. While you can sell the NFT itself, you are prohibited from reproducing or selling its content.

4. How do I purchase an NFT?

We keep all our collections on Rarible, one of the reasons behind this decision is that Rarible platform offers the option to use a traditional payment method via credit card or if you prefer cryptocurrency (you will need some cryptocurrency for the right blockchain in your wallet) by using a digital wallet like Metamask.

In order to purchase NFTs you will need to :

- create a digital wallet account FAQ Metamask

- connect the digital wallet to your Rarible account

*We strongly suggest that you connect your digital wallet with a cold wallet like Ledger to protect your assets, you can get more information on how it works here.

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