What is NFT: non-fungible tokens, explained.
Remember the days when cryptocurrencies were a futuristic concept, veiled in mystery, in other words, condemned as a scam? Ten years in the future — look who’s laughing now.
As innovations progress, the virtual world sees more emerging concepts that shake the virtual and the real world. The big question is whether a non-fungible token (NFT) is the new normality or just a short-lived idea?
Long story short, it looks like NFTs are here to stay. So, if you are still thinking, “what is NFT” we suggest it’s time to find out.
The magic of blockchain
“Non-fungible” means that it’s unique and can’t be replaced by something else. The ‘magic’ behind it is that NFTs are lodged on a blockchain ledger, in many cases, Ethereum blockchain. Blockchain is a digital system of recording information in a way that makes it difficult or impossible to change, hack, or cheat it. It is a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
Each block in the chain contains several transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT).
The keyword here is decentralized. According to the dictionary, decentralized means “transfer control of an activity or organization to several local offices or authorities rather than one single one.” What it means in the real world is that control is transferred from the central government — to the people. So basically, blockchain promises a world without a middle man.
How NFTs work
And when it comes to NFTs — the data of the NFT ownership is stored on the blockchain. Therefore it is unregulated, but can easily be verified and traced, while the person who owns the token can remain pseudonymous. Almost anything in virtual space can be turned into NFT: music, drawings, games or anything else you can upload to the virtual space. While the NFT that holds ownership is added to the blockchain, the file size of the digital item doesn’t matter because it remains separate from the blockchain.
So, if you decide to upload your picture and turn it into NFT — all it means is that you will store it on the blockchain, where the data will show that there’s only one truly ownership rights to that image, and that is yours. And you’re free to do whatever you want.
The future of NFTs
The technology and the concept constantly advance, adapting to the needs of the consumer. In the near future, NFTs can easily be integrated into our daily lives. For example, the technology can be used to verify the employees whether they had education or not; a venue could sell and track event tickets, cutting down on potential fraud. The sky’s the limit — we’ll just have to wait and see.
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