Preface

Definition of a Cryptocurrency Wallet

Cryptocurrency Wallet Address and Keys

Types of Cryptocurrency Wallets

Cryptocurrency Wallet Risks

Summary

Preface

The most heated debates are surrounding the digital assets, their stores of value, blockchain and secure cryptocurrency wallets. As you probably remember, a virtual currency (a cryptocurrency, in other words) is not stored on desktop computers or laptops. It exists only within the high-tech blockchain framework — a distributed ledger of records, identical copies of the aforementioned pieces of data kept by many people all around the world. So a crypto wallet cannot be labeled as a bag of digital gold, it is factually a blockchain access terminal.

A thing that confirms that you can perform operations with the crypt recorded in it on you. If the registry indicates that you have 0.001 Bitcoin, then it will be displayed in your wallet, and you can do something with this amount: exchange it for another cryptocurrency or transfer it to someone. The given analytical writing is devoted to the topic of what is a crypto wallet, types of wallets for storing cryptocurrencies like Bitcoin, Ethereum, ZCash, Ripple, Chainlink, Tether USD, etc. and the risk associated with the coin or token storage.

Definition of a Cryptocurrency Wallet

Let us get to it! What is a crypto coin wallet? A crypto wallet is a software app that allows virtual currency users to store, send, deposit, receive, buy, HODl, sell and retrieve their coins, tokens, and other digital currencies and assets alike. Likewise, you can purchase a physical object (a private hardware wallet like Trezor or best performing TrustWallet, CoinCover or Free Wallet multicoin devices) if you prefer privacy and security no matter what. After creating a crypto wallet, you can generate an address for each cryptocurrency you need in it. For example, this is how the address for the Ethereum cryptocurrency of its creator Vitaly Buterin looks like 0xab5801a7d398351b8be11c439e05c5b3259aec9b. The keys to your success are just in your crypto wallet!

Cryptocurrency Wallet Address and Keys

A similar combination that your wallet will generate will need to be specified every time you desire to get a transfer from someone in the selected currency. If you still got questions as to what is a crypto wallets and alike, then you should be aware that a cryptocurrency wallet is just a bunch of public (open) and private keys, nothing else more. The former one is not secret, it is available to the public in free access, and is utilized for identification when performing transfers, for instance, in Dogecoin (DOGE) to or from COinbase or CryptoPay.

There exists such a thing as a key seed phrase – a sequence of 12-24 simple English words (for example, infant, run, outdoor, mutual … and so on). This is “Plan B” for accessing the wallet if you suddenly forget or lose the standard passwords and appearances. The wallet of your choice will be generated automatically when you start using it. The seed phrase cannot be shown or shared with anyone. At a minimum, you need to write it down on paper and hide it in a safe place. As a maximum – learn by heart.

Types of Cryptocurrency Wallets

Broadly speaking, cryptocurrency wallets can be either very simple in use or else very complex and contain a lot of satellite features to satisfy the needs of a demanding cryptocurrency wallet user, be it an investor, trader, miner, borrower, among others. In essence, what is a wallet for crypto? Well, in layman’s terms, it is a universal key to a digitalized world with zillions of opportunities to manage the financial portfolio at the touch of a single button. The central and defining types of cryptocurrency wallets you can select from are categorized as follows:

–          Software wallets;

–          Hardware cryptocurrency wallets;

–          Paper cryptocurrency wallets;

With these in mind, let us briefly discuss each type what is a wallet crypto can offer. Paper as well as hardware cryptocurrency wallets possess strong security measures and protect form malicious attacks performed by cyber hackers. The defining point is that both these types of what is a crypto wallet functionalities are stored not online but offline. However, their total number of useful functions is limited and there exist risks of losing or destructing the thing. 

More than ten years ago, online digital currency wallets took a plunge and made their way to the crypto universe. They have managed to offer a quick, easy and smart way of managing and monitoring virtual assets. But the flipside of the hot wallets is that the software is prone to malicious cyber attacks, user account manipulations, and the user does not own the private keys, which n its turn poses serious security breaches.

Going further, crypto wallets can be categorized into custodial and non custodial digital wallets respectively. In the realm of traditional finance, a custodian is an agent who keeps records of the client’s assets and ensures their safety, but the client himself or another structure on his behalf can directly manage it.

In the crypto world, things are a little simpler. A custodial wallet is a wallet that is registered, for example, on a crypto exchange or in some other intermediary service. It is convenient to manage it from the web interface, the login and password pair can be quickly and easily recovered, but simultaneously, the service provider knows your identity and has a direct and free access to assets – after all. It is they who are in the control of the private key, not you as an individual. 

An intermediary can freeze assets by court order or lose as a result of a hack in its infrastructure. A non-custodial wallet, along with its “contents”, is entirely your property and responsibility. No service will help if you forget both the access password and the seed phrase: the funds will remain on the blockchain, but nothing can be done with them. This is the solution you require to choose for storing cryptocurrency – at least the main part of the assets. 

Cryptocurrency Wallet Risks

Experienced crypto investors choose online storage as temporary. For long-term investment, cold safes are more reliable. For security purposes, it is best for crypto wallet holders not to open emails from phishing companies masquerading as real ones when receiving email. Which crypto wallet to choose Each cryptocurrency wallet is designed for a specific purpose. Some of the crypto storages do not work with certain programs and devices. When selecting a cryptocurrency safe, you should find out if crypto wallets support the operation of the cryptocurrency you need. 

For example, the latest versions of crypto wallets are multi-currency oriented, which is more cost-effective. Earlier versions only saved one type of coin. In order to use a crypto wallet, it is best to study the instructions. The reliability of a virtual currency wallet feature is ensured by:

–          Public and private keys;

–          Multiple levels of protection.

t is not necessary for beginner cryptocurrency traders to have a hardware safe. At first, you can get by with online storage. How to create a crypto wallet The way to create a safe for storing cryptocurrency depends on the type of storage. The easiest way to create a crypto wallet is to open a vault online with two-factor authentication. This makes the user account more secure. To do this, indicate the address of the email address, linking to the phone number. Then you should come up with a strong password. “Cold” safes are purchased at well-known trading floors.

Conclusion

The choice which virtual currency to choose for storing and managing your digital assets is huge and it is entirely up to you to select which type or types of the service you are about to select and use in your everyday life, However, always pay scrupulous attention to the security of your finds and do not trust anyone when it concerns your financial stamina and welfare.

The post What Is a Crypto Wallet and How to Make a Wise Choice appeared first on Hashing24.com/blog.

Intro

What Is Bitcoin?

Why Do People Invest in BTC?

Important Factors to Consider Prior to Purchasing Bitcoin

Where to Buy Bitcoin and Other Altcoins?

Alternative Venues for Purchasing Bitcoins

How to Purchase Bitcoin Online?

Conclusion

Intro

Whatever the case, the pioneering Bitcoin cryptocurrency has demonstrated its meteoric growth for over 14 years and it is widely used as a means of payment in every corner of the world. At the date of writing, its total market capitalization is valued at $574,256,564,779 and occupies the first place in the crypto charts. The people’s involvement with Bitcoin as the “golden digital standard” is all conquering: some people are affected by its gigantic volatility and they speculate on crazy price swings, some use it as a store of value in order to boost and diversify their financial portfolios, while others are mesmerized b its decentralized nature and anonymity. One way or another, the best performing cryptocurrency has firmly made its path in our lives, however the problem outlined as “how can I buy some Bitcoins and where to do this fast and safely” is bothering the minds of millions of people. Let us briefly discuss the issue “how can I buy Bitcoins” and provide some basic recommendations on where and how to do this.

What Is Bitcoin?

It is needless to describe the popularity of the BTC crypto in our days, but one thing that is worth going in to more detail is the concept of Bitcoin. Let us step it up and get to know it closer. To put it clearly, Bitcoin is a virtual currency that operates on a P2P basis using the blockchain technology without any centralized issuing or controlling authority. Bitcoin’s creator, Satoshi Nakamoto, made it available to the wide audience back in 2009 and since then, it has become the trend-setter in the crypto universe. The crypto uses the Proof-of-Work consensus algorithm to mint new coins into mass circulation. The minimum unit of the Bitcoin cryptocurrency is named after its creator, — Satoshi. The circulating supply of Bitcoins is limited to 21 million units and roughly every four years, the mining reward for minting new BTC coins reduces by half in order to avoid inflation. The key features of Bitcoin that attract all the interested people from all around the world are:

–          Decentralized nature;

–          Privacy as well as fundamental fungibility characteristics;

–          Highly speculative digital asset;

–          Relatively fast Bitcoin transaction processing due to the implementation of Lightning Network;

–          Excellent financial portfolio diversification because Bitcoin is viewed as the golden standard in the world of crypto;

–          Buying and selling Bitcoins has become an easy walk due to its widespread use, popularity, hype and accessibility;

–          Hard capitalization and limited supply;

–          Irreversible transactions and anonymity;

–          Great liquidity and network scalability;

–          Highly resistant to censorship and control by the governmental bodies.

Why Do People Invest in BTC?

Undoubtedly, there is something mesmerizing in crypto investments, especially choosing Bitcoin as the main financial portfolio diversifier. A few decades ago, everyone was mad about stocks, gold, metal, oil, futures, bonds, derivatives and so on and so forth. Now the trending investing position has been occupied by decentralized virtual currencies, whereas the youngsters are overwhelmed by Bitcoin and altcoins fueled by inevitable social media driven future perspectives. The greater the people’s involvement in cryptos, the more the Bitcoin market capitalization expands and its value is on the rise. Here is a short list of the main reasons why people decide to make a step forward and get in to the realm of BTC and other virtual assets:

–          Speculative perspectives. The cryptocurrencies are volatile by their nature and it brings endless opportunities to make incredible profits in a short time;

–          Due to its programmed scarcity, Bitcoin is oftentimes used as an inflation hedge to secure investments;

–          Many people like the very trend of Bitcoin and they purchase, sell and swap (exchange) crypto to stay mainstream;

–          Educational purposes. People are amazed by the blockchain based technologies and want to get to know about the digital ledger, immutability, storage, online exchanges, crypto wallets, online crypto payments and P2P BTC purchasing;

–          The BTC mining market is overburdened with propositions to make passive income with cloud based BTC mining. A decade ago or so, solo BTC mining for beginners was very easy and it was possible to mine BTC with a regular desktop PC. However, the situation has drastically changed and crop adepts flocked the cloud based mining sector. Stemming from this, people invest in BTC mining to earn passive income and multiply their gains in the due course of time.

Important Factors to Consider Prior to Purchasing Bitcoin

Before investing your capital in purchasing Bitcoin or any other blockchain based coin or token, it is a prerequisite to conduct a scrupulous investigation and get prepared in advance. This is of utmost importance because this way, you can avoid scam projects, problems with regulators and taxation. save, protect and multiply your investments, store, HODL and transact freely crypto in any direction you deem it is necessary, among others. The more you know and the greater efforts you take with precautions, the smoother your crypto experience will be. Let us get started with outlining the key factors before buying crypto.

Choosing Exchange Service

There are virtually hundreds of crypto exchange service providers offering to buy Bitcoin and altcoins at fair prices like Coinbase, Binance, Switchere, Paybis, Kraken, etc. However, you should decide which crypto exchange or trading platform you are about to use for purchasing crypto, at the same time paying special attention to website usability, fees, exchange directions, licensing, regulation, security, customer loyalty programs and genuine customer reviews.

Security

Use secure Internet connection networking in your everyday business life. Never use public internet connections for your financial transaction processing and/or deal striking. Besides, make sure to check if the site’s architecture and infrastructure are well protected and your user account will not be compromised in any event. Always get familiarized with the security and privacy policies of the service provider and ascertain that offline crypto wallets are deployed by the chosen provider. Anyhow, if the private keys are not yours, you are at risk of losing your money at any moment. Check out is the website implements two factor authentication (two step verification), inactivity logout periods, wallet addresses whitelist. The more you know, the more you can control the process of managing your cryptocurrency portfolio.

Fees

By all means, the fee structure and policy can play a pivotal role in choosing a reliable brokerage firm to buy Bitcoin online. The crypto exchange services charge different commissions for their services, varying from deposits and withdrawals to trading and liquidation fees. In fact, this is the budget forming income for crypto trading platforms. Different providers charge fees depending on their reasonability, secure architecture, personnel involvement, legal stuff, salaries and business integration policies and marketing strategies. Nonetheless, always double check the fee details and make your own calculation after your order payment because certain platforms may charge unreasonable hidden fees with an aim of making additional profit. Let us demonstrate how different platforms charge for their service provision:

The figures are presented for illustrative purposes and may slightly differ. However, as you may judge from the commission details, the percentage can greatly differ from one exchange to other conditioned by geography, legislation, usability, greed and trademark recognition.

Ease of Use (UI and UX)

The final decision to use a particular platform to buy, sell or swap Bitcoin or other virtual currency may be greatly impacted by the smart ease of use of the exchange services. The majority of companies invest tons of money into developing a user-friendly interface with intuitive navigation and multilingual website localization. Of particular interest is a nifty mobile application made available by progressive crypto platform for a toll-free usage. They may contain versatile price alerts, charts, graphs, order books, built-in account balance features as well as staking, lending, borrowing, Bitcoin cloud mining services, instant crypto-to-crypto swaps, just to name a few.

Versatile Payment Methods

A wide choice of available payment options for buying the first and most popular decentralized asset is astonishing. A person can choose the most preferable way to pay for his or her crypto purchases or online sales, starting from conventional VISA, Maestro, Mastercard, American Express, Electron bank cards (credit, debit, prepaid personalized and non-personalized cards) ending with region-specific payment methods, e-payments and wire transfers. It allows for more freedom in managing and controlling the financial portfolio and it factually boosts the liquidity of the crypto industry. For illustrative purposes, let us view the number of available payment options in different crypto exchange platforms:

As far as you can observe, the difference rate is paramount and it is also worth getting familiarized with the trading pairs available for instant buy and sell orders. The thing is that the richer the choice of crypto trading pairs, the more liquidity it can bring to you and your trading strategy. As of lately, a lot of crypto trading platforms started to issue their own branded crypto card for online payments with real time conversion rates on the Internet. The more a platform can offer to its users, the more attractive it becomes to crypto beginners and seasoned professionals alike. Finally, crypto oriented sites add more and more features to their sites with an aim of attracting new users, among which are staking, P2P lending, over-the-counter desks, DeFi projects and NFTs, just to name a few.

Licensing

In view of the increased interest in crypto transactions, anonymity, decentralized nature of blockchain technologies by fraudsters, terrorists, scammers and cyber criminals, the situation dictates that the activity of crypto trading and exchange platforms must be regulated to a certain extent. The more platforms report about their turnover and transaction activity, the less the risk of being deceived by companies with poor reputation. Each licensed and regulated exchange values its brand, trademark and reputation, therefore the risk of scams and unlawful user account manipulations is minimal. The list of popular regulated and licensed crypto trading providers is as follows:

By and large, regulation by authorities and licensing are the signs of a mature approach to business running and iti s purely customer oriented. In fact, regulation does not allow certain governments to avoid applied political, economic and military sanctions and keep on laundering money using the blockchain based technologies.

Taxation

Whatever the case, it is your obligation to know what tax laws are applicable in this or that jurisdiction. The crypto market is largely not regulated, whereas in some countries like China all crypto related operations are banned.

Where to Buy Bitcoin and Other Altcoins?

For experienced traders and newcomers to the crypto industry alike, crypto trading platforms offer a paragon of useful instruments to buy and sell crypto using the trading engine. Traders submit buy and sell orders in the order book and speculate on price swings. For those who want to experience greater risks in crypto investments, a lot of crypto trading platforms like Kraken, Bitfinex, HITBTC, Coinbase and alike offer margin or leveraged trading. To buy Bitcoin with a crypto trading platform, it is necessary to fund a user account and place a buy order (market or limit).

For over five years or so, online cryptocurrency exchange platforms have taken the plunge and are one of the most popular venues for purchasing Bitcoin and other altcoins. You may wonder why it is so? The answer is pragmatic: buying Bitcoin turned out like an easy walk to a shopping center. At the onset, it was even redundant to register an account and go through KYC verification. The main beauty of online crypto exchanges was ease of crypto access and simple user workflow. However, in due course, when the regulatory compliance became stricter, the GDPR, CCD and AML policies were implemented to eliminate any chance of fraudulent activities.

Case in point, over-the-counter trading allows to move large amounts of money without using public order books on crypto trading platforms. This option is suitable for high volume single traders and institutional traders. The minimal entry point may start from a few hundred thousand dollars and the only limit in this case can be the starting capital. A lot of wealthy whales use OTC trading to sporadically transact millions of US dollars worth in crypto.

In its turn, decentralized P2P cryptocurrency exchange platforms like LocalBitcoins allow to strike deals for buying and selling BTC and altcoins without involving third-parties.

Alternative Venues for Purchasing Bitcoins

The ways to purchasing BTC are not limited to trading platforms, online exchanges, OTC trades, or P2P exchanges. There exist a lot of other methods to buy Bitcoin online. One of the most popular ways to get some crypto near your house, workplace, etc. is Bitcoin ATMs. You can insert paper cash in the slot and purchase or sell Bitcoin in real-time. Nonetheless, using ATMs for purchasing crypto is rather costly due to service charges associated with the ATM exchange. The average fee for buying BTC at Bitcoin ATMs is more than eight percentage from the total amount (by contrast, online crypto exchanges charge from four to five percentage respectively). Nonetheless, Bitcoin ATMS can be found in all popular venues like hotels, airports, stores, gas stations, etc. As of today, the United States of America are the leaders in installed Bitcoin ATMs.

As of recently, PayPal has made it available to US residents to buy crypto. Unfortunately, the rest of the world does not have access to the option of buying crypto, which is why its spread and popularity are rather slow paced. Another drawback of PayPal is that a user cannot transfer crypto outside his or her PayPal account. To crown it all, there are very few crypto exchanges that support PayPal as a payment gateway.

Different brokerage firms offer their services including the purchase of Bitcoins and other popular cryptocurrencies. However, the Bitcoin purchases via the brokerage firms are unprotected by insurance. A person may buy futures contracts on BTC and trade the coin right there.

How to Purchase Bitcoin Online?

Let us describe how to buy Bitcoin using different examples. For a starter, we can begin our crypto journey with online crypto exchange platform Switchere. To buy Bitcoin online using your credit card, simply register an account with the Switchere crypto exchange and complete the basic verification tier. The onboarding process will take from 10 to 30 minutes. Once registered and verified, you can use the widget form to enter necessary pay-in details like the amount you want to convert, the payment method and your crypto wallet address. Once you check all the order details and make a corresponding payment, you will receive Bitcoins to your crypto wallet. Alternatively, you can download the Switchere mobile app and purchase BTC using your smartphone.

Regarding the purchase of BTC on crypto trading platforms, let us take Binance as an example. You do the same as with any online crypto exchange: register an account and get verified. Set up your account security options and deposit some funds to your user account. Once your balance is topped up, you can use the trading dashboard and submit orders to buy crypto. Likewise, you can buy BTC using your regular credit card similar to online crypto exchanges. In general, the mechanism of buying BTC is very similar with the rest of payment alternatives. But it is important to take into consideration that you have to store your crypto assets in your personal wallet, preferably in cold storage in order to avoid cyber hacks, blackmailing, account manipulations, or unsanctioned use of your balance.

Conclusion

Drawing closer to a conclusion, be sure to investigate the topic prior to making any financial decisions and do not invest more than you can afford to lose because cryptocurrencies are extremely volatile and you can either gain or lose money in a matter of seconds. Stay tuned for more useful articles on our official blog and join the crypto mainstream today!

The post Dilemma: How Can I Buy Bitcoin and Other Cryptos Online? appeared first on Hashing24.com/blog.

Preface

What are NFTs (Non-Fungible Tokens)?

How Do NFTs Function?

Use Cases of NFTs

Why NFTs Are So Popular?

Illegal Activities Involving NFTs

Which Blockchains Support NFTs?

Are NFTs Cryptocurrencies?

Best Places to Buy and Sell NFTs

NFT-Backed Loans

Criticism Surrounding Non-Fungible Tokens

Conclusion

Preface

In our days, the digital technologies play a pivotal role in the lives of every person in the world. It stands to reason that digital assets, blockchain revolution and economy tokenization are trending nowadays and there is a certain overhype surrounding cryptocurrencies, DeFi and CeFi projects, and so on. The recent mainstream impulse (over the past few years) has been fueled by the so called non-fungible tokens (abbreviated as NFTs). However, the tokenized non-fungible assets have been in circulation for about 5 years already, the real popularity of NFT data pieces blossomed in 2021 and 2022 when celebrities started to tokenize and trade tokenized non fungible token items thus sending NFTs to new heights. Like it or not, but there are millions of people who do not have a clue about what is NFT, what are non fungible tokens and why people go crazy about these unique data units represented as NFTs on blockchain. Let us find it out and provide a definitive explanation to what is it non fungible token.

What are NFTs (Non-Fungible Tokens)?

Prior to giving a definitive answer to what is a non fungible token, its content, what it means and represents, let us first figure out the meanings of “non-fungible” and “fungible.” Fungible or fungible assets stand for items or asset classes that possess the possibility to be traded (bought or sold) or exchanged with the same type of asset or unit. In this context, one ETH always equals one ETH and it can be easily traded at the same value, much like fiat, crypto or any other legal tender . On the contrary, non-fungible tokens are unique and can not be reciprocally interchangeable. NFTs are one of a kind, there are no two identical NFTs and this is exactly what makes them so attractive to the audience.

Next, it is about time to define what is NFT (non fungible tokens what is that?). By and large, NFTs are represented as digital assets that operate atop of a blockchain network (be it Ethereum, Solana, Tron, or Concordium). What is NFT token? It is a type of digital certificate that establishes the ownership of goods, items or an asset that represents a great variety of both tangible as well as intangible things like art works, cryptographic paintings, tickets, postcards, music, tweets and so on and so forth. At the date of writing, the market capitalization of NFTs equals more than 11 billion US dollars, as per the data obtained from the CoinMarketCap.com analytical portal. Last year, its total market cap equaled incredible 41 billion US dollars due to an unprecedented interest in NFs spread among:

–          Celebrities;

–          Artists;

–          Musicians;

–          Sports players;

–          Politicians;

–          Gamers.

How Do NFTs Function?

NFTs work using the blockchain technology that records digital transactions in the ledger. Most of crypto addicts are familiar with blockchain because it is the underlying technology behind cryptocurrencies like Litecoin, Dogecoin, Chainlink, Stellar and so on and so forth. Just like virtual assets, NFTs include ownership details for flawless identification and data transfer rights. NFT owners can supplement metadata or specialized attributes regarding the concrete asset class. Factually, NFTs can represent any item or goods that have intrinsic value, be it a painting, game ticket, real estate, vehicle, etc.

The lion’s share of the best-performing NFTs is hosted on the Ethereum blockchain protocol because it supports the ERC-721 token standard. This token standard outlines the minimalistic interface options like asset ownership details, meta data as well as protection measures. In their essence, NFTs function like cryptographic tokens on blockchain, thereby creating of identifiable data hash blocks. This particular encrypted transaction process guarantees the authentication of each digitalized asset coupled by corresponding digital signature that allows to monitor the ownership rights of NFTs. To put it simply, a non-fungible asset is all about proof of ownership rights, which stands apart from copyright. You should keep in mind that digital non fungible tokens can have only a single owner at a time, thus there can not be two owners of one NFT respectively. Ownership rights are realized through the unique identifiers as well as metadata that no other NFT can duplicate.

Use Cases of NFTs

An non fungible token is minted from digitalized objects as a representation of digital or non-digital assets. In fact, NFTs are created via smart contracts operating on blockchain and assigning ownership rights and control the transferability of non fungible tokens. When a person creates a new NFT, there takes place the code execution, which is stored in digitalized smart contracts that pertain to various blockchain standardized format, be it the most popular ERC-721 or TRC-721, for instance. This data is added to the digital ledger where the nn fungible token is being controlled. Here is the list of what NFT can represent (it is exhaustive because there are many new cases arising on the horizon — it is all about creativity and imagination):

–          Graphic art;

–          Videos;

–          GIFs;

–          Internet memes;

–          Virtual avatars;

–          Metaverses;

–          Tweets;

–          Music records;

–          Domain names;

–          Invoices;

–          Tickets;

–          Medical records;

–          Signatures;

–          Certificates;

–          Legislative acts and many more use cases.

The ownership right of non fungible tokens are oftentimes have relevant association with a license to utilize such a linked digital asset, but generally does not confer copyright to the buyer. Some agreements only grant a license for personal, non-commercial use, while other licenses also allow commercial use of the underlying digital asset The key characteristics of digitalized non fungible tokens encompass:

–          Non-interoperability. It stands to reason that data stored in NFTs can not be exchanged or else used in any other fashion.

–          Rarity. To put it simply, the smaller number of NFTs in circulation, the more valuable they are for people interested in digital art or any other industry.

–          Non-destructible. Since non fungible tokens are stored and managed via blockchain, they can not be removed or annihilated from the ledger.

–          Non-divisibility. Considering the fact that NFTs are non-fungible by their nature, a person can not divide and transact a certain volume of non-fungible assets to other people thus far.

–          Authenticity. NFTs are always one of a kind.

The greatest benefit of non fungible tokens as of today lies in the digital content domain. Content creators do not need to use the services of galleries or exhibitions, pay bills for premises, public relations, share royalties, etc. NFTs create, demonstrate and boost a new digitalized economy — the ownership is instigated into the content per se. When creators of NFTs sell their creations, the money received from the deal go directly to them, plus the original author of the creation can receive royalties after the resale of minted non fungible assets. Metadata encrypted inside the minted NFT can not be altered and this displays the entire beauty of the NFT phenomenon.

There are so many of the best performing non fungible tokens that can be easily located in streamlined  games and online games, which are oftentimes referred to as play to earn (abbreviated as P2E) games. The main concept of P2E games is that the developers of NFT-oriented games incentivize the audience to get involved in their gaming platforms via tradable non fungible tokens that can be obtained by completing a chain of missions. Among the most popular NFT games, we can mention the following trend-setting ones:

–          CryptoKitties;

–          Axie Infinity;

–          Gods Unchained;

–          The Sandbox;

–          Cryptoflowers.

NBA stars are also actively involved in the promotion of NFTs, not to mention popular celebrities, movie stars, entrepreneurs, influencers and football players. Whatever the case, the future prospectives for non fungible tokens look pretty promising, conditioned by the fact that the total market capitalization of NFTs in 2021 reached a remarkable 41 billion US dollar mark. The analysts and crypto experts predict that nearly a half of newcomers in to crypto industry are about to use non fungible assets as their entry investment points. How about that, Elon Musk!?

Why NFTs Are So Popular?

Believe it or not, but there are zillions of numerous reasons why ordinary people, traders, investors, etc. start using NFTs in their everyday lives. First and foremost, the cool thing about non fungible tokens is that they represent a store of value, just like any other cryptocurrency, be it Bitcoin, Dogecoin, Yearn.finance, Tether USD, derivatives, futures, commodities, precious metals, raw oil, wines, etc. Everything is dependent on demand, how much people are willing to pay for this or tha non fungible token right now or in the future. It is similar to baseball cards that gain value with the force of time. In simple terms, non fungible tokens are gaining massive popularity due to the symbiotic nature of fandom, hype, the royalties involved, and the rarity.

The more a certain NFT is online and trending, the more value it gains for the audience. Once the digital asset is sold on a certain specialized marketplace, the creator of the maiden non fungible token receives his or her ten percent out, whereas the current buyer of the NFT gets the rest of the value. NFT standardized assets are really widespread in various blockchain technology sectors, particularly in the development of Dapps and other blockchain based solutions. Case in point, there is an increasing number of decentralized fintech projects interested in integrating and developing non fungible tokens to boost their architecture and the ecosystem overall.

About a year and a half ago, the music industry generated nearly twenty five million worth by trading non fungible tokens on specialized auctions and marketplaces. NFTs are even popular in the pornographic industry. As far as you can see, the NFTs are revolutionizing the lifestyles of billions of people and make things much simpler, faster and accessible. Due to the fact that NFTs can be easily bought and sold on the Internet, it makes people excited about the current perspectives that the next-gen technology can offer to everyone interested in digital technologies. The market efficiency is driven to the maximum and one does not need to buy actual physical object and store it in the garage. Let us say that it is needless to have only one owner of the physical object (painting or music). Instead, its digital counterpart can have several owners , whereas each and every is responsible for their portion. Such principles can accelerate the value and future revenues of the object under discussion.

Illegal Activities Involving NFTs

Despite all the benefits that NFTs and blockchain can offer to content creators, there is always a fly in the ointment. Due to volatility and market fluctuations, NFTs can be potentially used for illegal money laundering because the blockchain technology allows to transfer values anonymously. Therefore, the predominant share of NFT marketplaces are eager to comply with regulatory requirements and require compulsory ID verification (know your customer checks) in order to prevent any illegal manipulations with non fungible tokens. Some countries, government and officials use crypto, NFTs and any other blockchain based technologies to evade sanctions, sponsor terrorism, human trafficking, drug dealing, Darknet activities, and so on and so forth.

It is obvious that digital art works do not require transportation, taxes, custom checks, that is why fraudsters show a vivid interest in non fungible tokens for their illegal money laundering activities. Most national jurisdictions do not regulate the turnover of non fungible tokens, therefore the temptation to earn in an illegal way of NFTs is paramount. It is next to impossible topredict the crazy price swings of NFTs: today one non fungible asset may cost a few bucks, while in a week its price may reach millions just like that. Their meteoric volatility attracts criminals like a magnet.

Which Blockchains Support NFTs?

As has been discussed above, the key blockchain player on the NFT market is Ethereum. Its smart contracts allow to easily buy and sell non fungible tokens, however the gas fee for blockchain transactions on the Ethereum network is very high and the speed (transaction per second) is not impressive. There are more and more blockchains appearing that support NFTs and allow to trade virtual assets cost-efficiently and faster by contrast with the Ethereum ecosystem. We can enumerate some of the competitors of Ethereum:

–          Tron;

–          Solana;

–          Binance Smart Chain;

–          Concordium;

–          Flowchain;

–          Tezos;

–          Wax.

To start with, Tron was the pioneering blockchain to have been following the Ethereum ecosystem with regard to pumping its DeFi networking for more than two years already. The Tron’s maiden non fungible token standard termed as TRC-721 was officially announced with the aforementioned period and its prime aim was to accelerate the realization of the mechanism of different blockchain based Dapps and straighten up the fierce rivalry with Ethereum. Each and every TRC-721 non fungible token is unique and plays just the same important role as TRC-20 standard tokens respectively.

The Solana’s extreme throughput and remarkably low commissions influence the choice of many people to choose it to mint new non fungible tokens, buy, sell, HODL them without any backhanded concerns. The Solana standard presents the concepts of royalties, editions, and promotes the open sourced contracts for the corresponding metaverse ecosystem. The average minting costs equals circa one and half US dollars, and there are more than 6 million Solana-based NFTs in circulation.

BEP-721 is a Binance Smart Chain token standard that allows to mint and operate new non fungible tokens and, besides, it is perfectly compatible with EVM because it is an extension of the famous ERC-721 token standard. With the BEP-721 token standard, each and every non fungible token is assigned a unique identifier module. Ordinary people can mint, transfer as well as buy and sell multiple collectibles with a direct reference to a market value, popularity, scarcity and so on and so forth.

Further, Concordium implements the so called CIS-1 token standard for non fungible tokens realized on smart contracts. It makes it possible for off chain apps to monitor corresponding token balances, meta data and authenticate all the pertaining events.

Flowchain has been particularly designed for gaming and non fungible tokens and is very similar to the one realized on the Ethereum network. Besides, Tezons deploy the TZIP-12 token standardized algorithms for non fungible tokens, which reverberates closely with the Ethereum’s ERC-1155 token standard. Finally, Wax uses the Simple Assets smart contract system which in its turn allows to mint, collect and trade NFTs in a fast, safe and secure manner.

As far as you can see, the number of blockchain standards for minting and managing non fungible tokens is growing and it is just a matter of time when NFTs become a daily routine in our smartphones. The main reason behind the popularity of NFTs is a perfect opportunity to monetize creativity and earn great rewards for digitalized items on blockchain.

Are NFTs Cryptocurrencies?

It is not surprisingly that many people use the terms NFTs and crypto interchangeably because both use the blockchain technology, but this comparison is not correct per se. Non fungible tokens possess absolutely different functions and use cases by contrast with the majority of cryptocurrencies be it Bitcoin, Stellar, Chainlink, Litecoin, Omisego, etc. Each non fungible token is unique whereas cryptos are fungible just like fiat currencies or CBDS and serve as a medium of exchange. Each and every non fungible token has a unique signature and identifier with metadata and it is not possible to equally exchange one NFT to another. Therefore, do not mix these two blockchani based concepts and follow the news and announcement to sta up to date with what is going on the digitalized high tech arena.

Best Places to Buy and Sell NFTs

After grasping the idea and concept of non fungible tokens and their core benefits in comparison with popular cryptocurrencies, a person may want to mint, acquire, collect, store, sell or HODL non fungible tokens. As a starter, you need to have a digital wallet to store your non-fungible assets and cryptocurrencies, which can be used to purchase NFTs. Then, you need to decide which NFTs you want to trade and where — which NFT marketplace can suit your needs. NFT marketplaces are similar to cryptocurrency exchanges, that is, they act as intermediaries between buyers and sellers of non fungible assets. When choosing an NFT marketplace to deal with non fungible assets, you should pay close attention to its reputation and brand recognition. After all, you shall be investing your own money. Surf the internet for genuine customer reviews, how popular the service provider in your region or country, what is so specific about it, what trading volumes it handles in a day or annually, and so on and forth.

Moreover, after you definitely know what non fungible assets you want to deal with, check the website if it supports your preferred type of non fungible tokens. The choice is incredibly vast and some marketplaces may concentrate on provisioning specialized tokenized items only. As a rule, when you opt to purchase a non fungible token online via an NFT marketplace, you have to fund your account balance with crypto. Therefore, if your preferred NFT was realized on Tron or Solana blockchain protocol, make sure that you have access to the aforementioned cryptocurrencies to make your purchase of NFTs. Plus do not forget about commissions that marketplaces charge you for striking deals, be it buy or sell operations involving non fungible tokens. Here is the list of popular NFT marketplaces:

–          OpenSea;

–          Rarible;

–          Binance;

–          SuperRare;

–          Nifty Gateway;

–          Solanart;

–          Coinbase;

How to get started with trading non fungible tokens? It is not Latin — it is as easy as falling off a log. After you made up your mind which NFT you want to purchase and the service of which marketplace you are about to use, you need to go through a quick onboarding process. Register an account with the chosen marketplace, verify your identity by completing an automated KYC check where you will be asked to suffice an ID document. Once your account is verified, you can further choose among payment options: a) you can transfer funds to your account balance; b) connect your crypto wallet or else c) you can purchase the preferred crypto using a conventional credit/debit card and make online purchases. Once your account balance is topped up, you can navigate to the NFT marketplace, use filters and select the preferred non fungible token for buying or selling in a matter of minutes. Once purchased, you can transfer the NFTs to your private wallet (be it cold or hot storage).

NFT-Backed Loans

Well, the use of non fungible tokens is really impressive because NFTs can be used as a collateral for loans. This is similar to crypto backed loans, where a borrower lends a certain amount of money by collaterizing his or her loan: a borrower uses BTC as a collateral to borrow USDT in order to trade on crypto trading platforms like Binance, Coinbase, Kraken or Poloniex. The key peculiarity of crypto backed loans is that it is entirely market driven and the value of a collateral can either increase or go down. There are even credit lines involving cryptocurrencies. Concurrently, the say mechanism has been realized with NFTs, where a person uses his or her NFT(s) as a collateral to borrow funds. That simple. Here, NFTs drive the liquidity of the capital in a safe and secure way. Just like five years ago crypto backed loans were a phenomenon, NFTs are gaining popularity in the metaverses.

Criticism Surrounding Non-Fungible Tokens

Due to the fact that the contents of non fungible tokens are viewable for the masses, any person can effortlessly copy a data file referred by the non fungible token. Some analysts even claim that purchasing and owning non fungible assets is symbolization of the societal status, expressing that a person can afford to buy and own the creative work. Next, there are environmental issues (just like as it is the case with Bitcoin, Ethereum, Litecoin, etc.) whereby the blockchain based transactions involving NFTs consume a lot of electricity and impact the greenhouse effect on the planet. Besides, there are frequent cases of plagiarism involving non-fungible tokens and permissionless copying of items and art works.

Conclusion

Well, we hope that this detailed blog article has been eye-opening for you in terms of what is a non fungible, how does it function, where to buy it, major risks involved and so on. Just like cryptocurrencies and DeFi projects, non fungible assets are making their way in the mainstream and let multiple people monetize their creativity and merchandise. About five years ago, no one even could not think that digital certificates for ownership can be a reality. But now the situation has drastically altered and NFTs are virtually everywhere and influence the tokenization of the economy to a large extent.

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