tl;dr
In short, an NFT is a one-of-a-kind digital asset that can also represent real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos. The NFT is the re...
In short, an NFT is a one-of-a-kind digital asset that can also represent real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos. The NFT is the record on the blockchain that stores information about the file: who created it, who put it on the blockchain, who has bought it and the respective prices. That is what the actual NFT is. All of this is done publicly.
Now, there are many places where you can create and trade NFTs. Valued at over $13B, OpenSea is the largest. OpenSea's catchphrase is they want to be the Amazon of NFTs. That said, there are many, many NFT marketplaces, including Rarible, SuperRare and NBA Top Shot, to name a few. Each has their own twist, and some are direct competitors. One example of differentiation in NFT platforms is working with more than one blockchain. I mentioned in one of my videos that OpenSea was going to integrate Solana NFTs into the platform. Another differentiator is creating an NFT-specific marketplace, such as NBA Top Shot. That platform is the only platform on which you can buy and sell their NFTs.
NFTs are not only for the digital world. Many NFTs connect the digital realm with the real world. For example, an NFT can serve as admittance into a social club or restaurant. Suffice it to say, there are some strong use cases for NFTs.
Now that we have that out of the way, let's discuss some pitfalls. There have been a ton of supposed rug pulls, breaches, hacks and intellectual theft. Because it is an unregulated space it makes for a very chaotic feeling to it. So, my general rule is always do your research!
I believe, over time, the NFT space will have the dust settle and you will see safety in transactions increase.