NFTs or Non-fungible tokens are making changed nearly every sector of society. They’re transforming everything whether its finance, art, real estate, or any other assets.
In the following article, I am going to explain about fundamental of NFTs from technical and non-technical aspects.
What is NFT?
An NFT, or ‘non-fungible token’, is a unique, digital asset that is stored on a blockchain and provides certain ownership rights to any asset specially digital asset like Digit Art.
NFTs are described as ‘non-fungible’ because each one is unique and has a different value, where ‘fungible’ assets such as dollars or Bitcoin are identical and interchangeable.
History of NFT
Early forms of NFTs have been around since the mid-2010s when Vincent Durham launched Namecoin, but it wasn’t popular until late 2017 when a digital cat-trading game called CryptoKitties went viral at that time NFTs gained momentum.
In 2018 when Ethereum launched ERC-721 for minting NFTs on Ethereum Blockchain NFTs became more widely adopted within the blockchain community.
Now, You can create NFTs using various Blockchain because NFTs is like a Digital Asset that has some value associated with this.
What is mint or minting an NFT
‘Minting’ an NFT refers to the creation of an NFT and its records then ownership of NFT on a blockchain for the first time. The minter may be the creator of the work that is associated with the NFT, for example an artist, or someone who has appropriate rights to mint an NFT of a digital asset.
There are so many NFT platform where you can mint your NFT and trade with others, one of the popular Marketplace is OpenSea.
Where are NFTs stored?
An NFT is simply a token that can be distinguished from other tokens. You can consider this as a Unique ID number in your database. This unique ID number is a hash of your file that can be stored either on Centralize location like AWS S3 bucket or decentralize location like.
It’s important to separate the concept of NFT from IPFS, because NFTs really have infinite use cases. IPFS is good for decentralizing art or any other digital asset but NFTs can be used for anything related to ownership (car ownership, real estate property).
IMPORTANT NOTE — NFTs are NOT stored on IPFS. NFTs simply contain data that points to a file on IPFS or any other storage engine.
What is the use of NFT?
One of the most important use cases of NFT is in art industry where artists and content creators can monetize their work. NFTs is a Smart Contract or a Program so its completely depends how the contract is written; creators can add royalty fee also in the contract and define profit sharing model whenever item is resold. There is broad scope to develop features around smart contract that doesn’t exist in traditional method.
There are so many other use cases of NFTs, some of them are given below:
- Authenticity of Products
- Real Estate
- Medical Records and Identity Verification
- Intellectual Property and Patents
- Academic Credentials
- Supply Chain
- Gaming Industry
How do I get an NFT?
It’s hard to imagine where the opportunities end. There is a huge potential and use cases around NFTs, maybe within a few years, NFTs might be a technology vital to our everyday lives.
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