NFTs (Non Fungible Tokens)

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Coinmonks

5 min readFeb 17, 2022

Introduction

The world crisis of 2008 destroyed trust in state currencies and those who control and manage them. Satoshi Nakamoto, in his post-crisis white paper, attributed the cause of the crisis to the greed of the financial institutions that manage the money and the callousness of the states that control the money. In the same white paper, Nakamoto introduced a cryptocurrency called Bitcoin, which is encrypted through blockchain technology, which we call crypto. That day Nakamoto formed the first link of the chain. Although it was not understood much that day, this technology that Satoshi Nakamoto presented to the history of humanity would turn into a revolution by absorbing money and all the instruments related to it. After the first ring, new rings continue to be added to the blockchain revolution every day.
While one startup took the speed and trust of this technology and established a payment and transfer system, another entrepreneur took the reliability of this technology and established a contract system, NFTs, which are on everyone’s tongue these days, emerged.

What is NFT?

Non Fungible Tokens, in the shortest definition, are digital assets that have no other equal. It represents many digital assets that are unique, from collector’s items to virtual shoes, from virtual game content to digital properties. NFTs are produced using blockchain technology, mostly with Ethereum token standards. However, unlike cryptocurrencies, they are not traded in Ethereum‘s ERC-20 standard, but in ERC-721 and ERC-1155 standards.

Unlike other virtual products that make NFTs unique, duplicate copies cannot be produced. When the producer creates the ring on the Ethereum chain, it only occurs in his own wallet, and when he performs the exchange or sale, it is tokenized from the wallet of the person who owns the token to the wallet of the other person. When explaining NFT, experts often give the example of electronic books. After the author writes the book, thousands of copies of the book reach the people who bought the book in the virtual environment, and a new copy is created in every transaction, but even if a product created with NFT is created virtually like an electronic book, it always remains a single one. No matter how many transactions are made, thanks to blockchain technology, these transactions are carried out through the original product without creating a new copy.

NFTs provide us with a fast, secure, and inexpensive transfer of the Mona Lisa. If we continue on the Mona Lisa example, the Mona Lisa painting is an incomparable commodity, it painted Leonardo da Vinci’s assistant at the time and is now one of the most valuable works of art in the world. Millions of dollars are spent securing this table. Sometimes, the smallest details are worked on for days to realize the transfer, and the transfer is carried out from one point to another. An NFT-created work of art is secured by blockchain technology and I’m sure it can be better protected than the Mona Lisa, and it takes a few hours to transfer, for free, for very small transfer fees. NFT tells us how to best protect the Mona Lisas of the future when necessary, It provides the opportunity to transfer in a short time for very low fees. This technology should not be viewed only as works of art, but when the time comes, scientists will use it to store, protect and transfer their scientific works easily. People will be able to store their collectible assets, which they want to keep, by means of this technology, and now sports cards created with NFT are stored and transferred securely.

How to buy and transfer NFT?

In order to buy NFTs, a connection between the wallet and the exchanges where NFTs are sold must be established. These wallets store NFTs and the cryptocurrencies used to purchase them. In order to buy NFT, the buyer must have Ethereum coin. It can be purchased from many exchanges that sell cryptocurrencies. But now Amazon and Ebay are developing their systems to be able to buy and sell NFTs with regular fiat currencies. In the future, we will be able to go to Amazon’s website and get a table created with NFT very easily with our credit card, then transfer it to our wallet and keep it. Ebay plans to take things further, selling non-virtual artworks, keeping his NFT in the wallet, and shipping the product itself. The sale of NFT is carried out between the buyer and the seller with the smart contract method. When the buyer initiates the transaction of the product he wants to buy in an exchange where NFT is sold, a smart contract takes place between the buyer and the seller, and when the transaction is completed, the token reaches the seller and the relevant artwork reaches the buyer. The transfer process, on the other hand, is the transfer of the product created with NFT, as if a token transfer is taking place between the buyer and seller wallets, just like the purchase transaction.

Conclusion

While Satoshi Nakamoto was writing that white paper that day, he only wanted to eliminate banks and states and create safer money, but he actually started the first sparks of the revolution that the financial system has been looking forward to for years. The steps that followed became the impetus for that revolution and brought blockchain technology to what it is today. NFTs should not be viewed as just a trend, they allow us to protect our assets and transfer them easily and securely. We will live and see together how this technology will make our lives easier and how far the blockchain revolution will reach.

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NFTs (Non Fungible Tokens)

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Written by Şaban İbrahim GÖKSAL