After digital tokens that are popularly referred as cryptocurrencies have taken everybody by storm first owing to the phenomenal gains and then due to volatility, there is another emerging investment option capturing investor interest. Yes we are here talking about Non-fungible tokens or NFTs. The reason being the price these NFTs are commanding, as per a recent report the Doge meme NFT has been sold at an exorbitant price of $4 million.
What are NFTs?
Before we head on to understand NFTs, there is a term 'fungible' in the phrase non-fungible token which needs to be understood. Fungible means a commodity that is freely 'interchangeable' with another in satisfying an obligation. In the cryptocurrency universe say for instance bitcoins are interchangeable/ fungible tokens or each one has the same value and looks just the same.
NFTs explained in simple terms:
To understand it we are first giving out an example say there are 10 coins worth the same value and hence they are fungible. Now if we change the shape of one of them say into a star or an oval then it will no longer be fungible. So, NFTs are exclusive tokens that are assigned to an item of your choice. This can be like an Id number that is assigned to your bank account by your bank.
NFTs also are a proof that digital assets are not a copy and indeed original.
NFTs available for investment in India
NFTs have been recently launched in India for investment by WazirX, the country's leading cryptocurrency exchange. The platform or the new NFT marketplace will carry unique artwork of various artist, media professional etc. and the purchase of the same has to be made via another cryptocurrency i.e. Ether or transfer of Ether.
For the transaction i.e. sale of the NFT, the cryptocurrency exchange charges 5% fee to the seller, while there is no fee for buyers. And then as and when the transaction is completed successfully, the NFT investment will be credited to your wallet.