What Are NFTs, And Why Do People Pay So Much For Them?

NFTs are assuming a real revolution on the internet, but do you know what they are? Below, we will explain in a simple way how they work, what they are, and why people can pay large sums of money for them.

What are NFTs?

An NFT is a non-fungible good, that is, goods that are not substitutable because they have characteristics that make them unique.

An example so you can understand it: Shoes deteriorate with use and can be replaced, so their manufacturing chain is a consumable good. And as examples of non-expandable goods, we can have unrepeatable works of art because there is only one copy.

NFT stands for Non-Fungible Token. Tokens are units of value that are assigned to a business model. The social network Tuenti used tokens to replace cash at festivals. Therefore, and together with what we have explained to you before, an NFT could be equivalent to a great unique work of art. For example the Guernica mural, there is only one painting like this in a specific place, and if you wanted it, you could only buy the original. You can have a copy, but not an original. And this is the behaviour of the NFT in digital form.

I don’t understand how NFTs work

NFTs work with a technology called blockchain or blockchain. Cryptocurrencies also use this type of technology. This ensures its cryptography and authenticity.

How much have they paid for them?

People who are buying NFTs for large sums of money do so with the premise that they will appreciate them in the future.

There are already those who have spent €260 thousand on this type of technology. Streamers like Willyrex have created their own NFTs called golems.

People do not buy them because they have a visual appeal, but because in the future, they will be revalued by having these characteristics that make them unique and give them the value and guarantee that there can be no other like them.