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NFT FAQs

1. Are NFTs only for the wealthy?

   If you’ve come across NFTs before, there’s a good chance you might’ve heard of some digital images selling for millions of dollars. While these limited examples have attracted significant attention, what many fail to discuss is the fact that there are millions of NFTs that change hands for less than $100.

   In fact, if you were to look at the NFT market as a whole, a vast majority of NFTs are actually very affordable. If you’re interested in seeing exactly how affordable NFTs can be, browse the thousands of NFTs available for less than $100 on Kraken NFT.

   Otherwise, you can check out our article Busting crypto myths: NFTs are only for the wealthy for more information.

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2. Why buy an NFT if you can just copy the image?

   Understanding what you actually own when you buy an NFT can be a tricky thing to grasp.

   Diving into the mechanics of these unique assets, what you buy during an NFT sale is a blockchain-based token that contains metadata and other important information that points to a specific file that lives elsewhere on the internet.

   This file might be an ape-inspired artwork, an audio file, or a parcel of digital land within a play-to-earn game. Sometimes, an NFT creator may hand over intellectual property rights to holders, but this is not always the case. When you buy an NFT, the thing you truly own is the verifiable ownership over that particular file, and the ability to sell those ownership rights on to someone else.

   Check out our article Busting crypto myths: You do not own anything when you buy an NFT for more information.

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3. What is the point of buying an NFT?

   It can be difficult to understand why someone would want to purchase the ownership of something digital when anyone could easily copy it by recording it or taking a screenshot.

   But, it’s no different to real artwork, or any other type of collectible. If you were to print a copy of the Mona Lisa and hang it up in your house, your version wouldn’t be worth the same as the original painted piece — even though they might look identical at a glance.

   We don’t simply place value in the way things look. We also value the provenance, history, and originality of unique work.

   So while someone might have a copy of your NFT, the transparency of blockchain databases would allow you to easily prove you own the original. Historically, most people have felt that owning an original creation is worth much more than a copy or a “fake.”

   Owning original NFTs can also grant you access to exclusive communities that you simply wouldn’t be able to join using a fake NFT. These communities may arrange special in-person events, provide insights into new collections and trends, and allow members to create their own unique utilities around the artwork. Many people feel that this access to these communities is the biggest value proposition for NFTs.

   Check out Why buy an NFT: community membership for more information on the benefits of owning unique digital assets.

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4. Are NFTs just a fad?

   NFTs have certainly experienced highs and lows during their relatively short time in the cryptocurrency market.

   While sales volumes and prices have fallen from their peak in 2021, NFTs continue to be an important emerging sector of the cryptocurrency industry.

   These unique assets also serve as a cornerstone in the development of the Metaverse, allowing players to become the true owners of the digital items they collect within virtual worlds. This promising new digital frontier could potentially breathe new life into NFTs, but it still remains to be seen.

   Check out our article The metaverse: An inflection point for more information.

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5. Can you turn anything into an NFT?

   Technically, yes. Anything tangible or intangible can be turned into an NFT.

   Whether it’s a parcel of digital land or a real collectible car, you can use non-fungible tokens to represent ownership over anything.

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6. Where do you store NFTs?

   It’s important to note that there are two parts to an NFT; the blockchain-based token and the digital file or thing it represents ownership of. Holders should ensure both parts are securely stored. 

   If the NFT is left in an unsecure crypto wallet, a hacker may be able to access it and steal the token from you. Without the token, you cannot prove ownership over the item it's associated with.

   Similarly, if the file your NFT points to is not properly stored using a suitable data storage solution like IPFS, it may end up disappearing from the internet. This would ultimately leave you with an NFT token that points to nothing, rendering it worthless.

   Check out our article How to keep NFTs safe for more information.

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7. What is the most expensive NFT ever sold?

   The most expensive single NFT ever sold, as of 2023, is Beeple’s “The First 5000 Days” piece.

   This NFT consisted of a collage of 5,000 individual art pieces Beeple had created since 2007. A Singapore-based crypto investor named Vignesh Sundaresan purchased the piece from the famous Christie’s auction house in 2021.

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