What is NFT and How Does it Work? - A Complete Guide
                     What is NFT and How Does it Work? - A Complete Guide
A Non-fungible Token (NFT) is basically a 
digital asset that is also called a 
cryptographic asset, that has a unique 
identification code and metadata that helps 
to differentiate it from a fungible token. But, 
unlike cryptocurrencies, the NFT cannot be 
traded or exchanged at equivalent values. 
Since cryptocurrencies are the same they 
can be used for commercial transactions.
www.desertcart.in
What is NFT and How Does it Work? - A Complete Guide
Hence, tokenizing tangible assets is a more 
efficient method of buying, selling, and 
trading them while also reducing the 
possibility of fraud. The NFT represents real-
world objects like music, art, in game items, 
and even videos. They can be bought or sold 
online frequently by using cryptocurrency. 
www.desertcart.in
How Do NFTs Work?
The NFTs are generally encoded with the same 
underlying software just like those used in 
cryptocurrencies. They have been around since 
2014 but are gaining popularity now because 
they are becoming an increasingly popular way 
to buy and sell digital artwork. They have a 
unique identification code and they create a 
digital scarcity in the market.
www.desertcart.in
How Do NFTs Work?
The NFTs work on blockchain technology and each of 
them has the potential for different applications due to 
their distinctive construction. Using a digital asset 
management platform makes it an ideal vehicle to 
digitally represent physical assets even such as real 
estate and artwork. Since the NFTs are built on the 
blockchain, they serve as identity management 
platforms and help to remove intermediaries and 
connect artists directly to the audience. This helps to 
make the transactions more efficient.
www.desertcart.in
The Most Famous NFT
The famous digital artist Mike Winkelmann, who 
is also better known as “Beeple” had crafted a 
composite image of 5000 daily drawings in order 
to create one of the most famous NFT of the 
moment. It was titled EVERYDAY: The First 
5000 Days and sold at Christie’s for a whopping 
69.3 million dollars. It was purchased by a 
Singapore-based cryptocurrency investor who 
paid for that particular artwork in Ether. 
www.desertcart.in
The Most Famous NFT
Anybody can view the individual images or the 
entire collage of images for free online. If you 
think anybody can download or copy the image 
then it is possible but the NFT allows only the 
buyer to own the original artwork. NFTs does 
contain a built-in authentication code that 
serves as proof of their ownership. The buyers 
can be proud and happy of owning the NFTs. 
www.desertcart.in
Is it Worth Investing in NFTs?
The advantages are that almost anyone can 
invest in NFTs and the form of investing in 
tokenized assets is accessible to everyone. 
The asset ownership is tokenized into the 
NFT and it can be easily and efficiently 
transferred among people located 
anywhere in the world. The ownership is 
secured using blockchain technology, 
which helps to digitally signify the 
ownership and make the asset more secure 
and transparent. Investors can gain more 
knowledge about digital assets while 
investing in NFT.
www.desertcart.in
Is it Worth Investing in NFTs?
The disadvantages are that the NFT cannot 
be classified as an asset class; since 
sometimes the value can be inflated and 
volatile. Since the NFTs are supported by 
the Ethereum blockchain it requires huge 
amounts of energy.
A single NFT transaction will require about 
one and a half days of electricity required 
to run a home. It is not easy to purchase 
NFT using fiat money like US dollars and 
hence has limited options.
www.desertcart.in
www.desertcart.in