What Is An NFT? Beginner's guide

Sure, you've heard the abbreviation NFT, even if you are not an advanced crypto user. Although NFTs (non-fungible tokens) have emerged recently they quickly became popular and seem to be everywhere these days.

We decide to explore what an NFT is, how it works and why people buy it.

What Is An NFT?

NFT stands for non-fungible token. It is a unique cryptographic asset on a blockchain which main purpose is to confirm the reliability of a certain piece of content. This is a certificate attached to a particular digital item.

To make it easy to understand, NFTs are like paintings in a gallery. This digital "gallery" gives artists and content creators a great opportunity to monetize their products without difficulties. Now every person can sell his piece of art as an NFT.

The main point that makes non-fungible tokens different from any other cryptocurrency is that the first one must be unique. If Bitcoin can be replaced by Dogecoin or any other crypto, this is not the same with NFTs.

The NFT market appeared in 2014 and was worth a staggering $41 billion in 2021, an amount that is approaching the total value of the whole global fine art market. It allows the buyer to own the original item as it contains built-in authentication, which serves as proof of ownership.

An NFT is:

nft features
Source: Arctic Wallet


Each has unique properties that are stored as a token on the blockchain.


There is no opportunity to buy a part of NFT or divide it into several parts.

Guarantee ownership

An NFT can have the only owner at one time. If you buy one, you get the exclusive ownership of a particular digital asset.


NFT can be bought or sold to another person via the blockchain.

Types of NFT content

Much of the current NFT market is centered around collectibles, such as digital artwork, sports cards, and rarities.

types of nft content
Source: Arctic Wallet

In fact, any digital product can be made into a non-fungible token, for example:

  • Image;
  • GIF;
  • Music;
  • Video and sports highlight;
  • 3D model;
  • Text;
  • Graphic art;
  • Collectibles;
  • Virtual avatars and video game skins;
  • Designer sneakers;
  • And even tweets

The main rule is that the NFT is valuable as long as it is unique.

How Does NFT Work?

Every NFT exists on a blockchain, which is a distributed public ledger that records transactions. There are two blockchains for creating and exchanging NFTs:

  • The Ethereum blockchain 
    The main features of this blockchain are low speed, high prices, and high commissions. Keep in mind that this blockchain has minimum requirements for NFTs, anyone can add a new one;
  • The Solana blockchain 
    Unlike the previous entry, the commissions here are low, as are the prices for tokens and the speed is high. Also, the mods here are more strict.

Keep in mind that different blockchains house different works. You are able to transfer and exchange NFTs only within the same blockchain.

Why Do People Buy NFT?


Some people just like the art, some want to support the artist, some want to have something unique. But there are those who call themselves collectors and buy NFTs as a hobby.

nft collectability
Source: Arctic Wallet

Prestige and Bragging rights

Besides collectability, people like to own goods in order to show superiority or brag about it. Therefore profile pic NFTs has been doing quite well.

nft prestige
Source: Arctic Wallet


Some people invest in NFTs for the technology or the future plans of the artist and developers.

nft investing
Source: Arctic Wallet


You can make money just by buying and selling the right projects. But first, you need to understand how to price a project. You'll also understand demand supply and human psychology to see whether the project would appeal to buyers.

nft trading
Source: Arctic Wallet

How to Buy Your First NFT?

If you're going to become an owner of NFT collection, there are some things you should do before the process start:

  1. Choose the most secure and convenient wallet where you'll store your collection. Pay attention! Now a lot of wallets allow this function.
  2. You should buy crypto, depending on the blockchain where you're going to buy NFT. You can use your credit card in any popular crypto exchange or even in the wallet itself.
  3. Then choose the NFT you want to invest in. You can do it via any of the online NFT marketplaces, e.g. Open Sea, Variable, and Super Rare.

Are NFTs Safe?

In fact, non-fungible tokens like any other cryptocurrencies use blockchain technology and it makes them practically unreal to hack. Choose carefully the place where you'll store your NFTs because if the platform where you hold them closes, you could lose your assets.


NFTs are a new digital technology that is only starting to become popular. There are many ways to make money on NFTs, from investing in existing ones or designing them yourself.

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