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What is an NFT and how do you store one?
Through NFT STARS, we're opening up the unique world of digital art and non-fungible tokens (NFT) to a greater audience and helping them to navigate the space. But before diving into minting or buying your first NFT, let's sort out the essentials, like what an NFT is, why it is considered a cryptocurrency, how to store one and what tools to use.
NFT stands for Non-Fungible Token, a one-of-a-kind digital asset that is not interchangeable with other similar items. An NFT is present on a blockchain and the token has a unique identifier that holds information about its provenance (it’s ownership history). This data is public and accessible to everyone on the chain. That makes every NFT unique and no two tokens could ever have the same properties.
Beeple's Artwork CROSSROADS The process of creating an NFT and putting it onto a blockchain is called minting and has almost no limitations. A user can digitize artwork, a piece of music, a video, create a digital ID for a physical item (like real-estate or a fashion item) in order to register ownership rights. To learn more about how to mint an NFT, read our guide ‘How to create an NFT on NFT STARS’. Once minted, the token can be freely traded on the crypto market, stored in a collection or even used as collateral on a decentralized lending platform.
That’s a big question, considering that anyone on the internet can easily download a video that others have paid $6.6 million for.
Even when it becomes a non-fungible token, the artwork can still freely circulate over the internet, be seen, saved, sent or otherwise used. In buying an NFT, a user doesn’t just purchase the digital representation of the artwork, they’re buying the proof that the ownership rights belong exclusively to them (like the title deeds of a property). Ultimately, the buyer gets a high-resolution digital artwork file and a token that holds information on all the transactions associated with that artwork. Thus, the Contract Address for Beeple's CROSSROADS is 0x12f28e2106ce8fd8464885b80ea865e98b465149 and the Token ID is 100010001. Digital artists can also create "shares" of their works - NFT fractions. This gives collectors and investors a chance to buy part of an NFT instead of paying millions to own the whole piece. Similarly, a creator can issue a collection of almost identical NFTs, much like collection cards but each would have its own unique identifier.
So you've bought an NFT, the next question is, where do you hold it? The image or video isn't stored on the blockchain as such, that would be very expensive to do. The file is usually stored somewhere else online, while the data associated with the underlying content is stored on-chain. The purchased NFT can be stored in wallets that support non-fungible token standards like MetaMask or Trust Wallet. Read our guide on how to set up a wallet and hold an NFT on it.