What is an NFT? Explained
This cyborg ape picture is on sale for $1.5 million. Could you imagine someone buying this same picture I just downloaded from google….Yes, some people would not only buy this but would sell it at a much higher price.
This picture is a digital art created by Yuga labs. Yuga labs is a blockchain company that has created 10,000 bored ape arts and is selling them as NFTs. So, the question is what is an NFT?
NFT (Non-fungible Token)
What does Non-Fungible Token mean? An NFT is a cryptographic asset based on Blockchain technology. An NFT can’t be exchanged or replaced because of its unique properties. You can exchange a dollar for a dollar because both dollars have the same value but in the case of NFTs, two NFTs can’t be the same.
NFT is becoming notorious because it is a great way of selling and buying digital art. Since every NFT is unique, a digital art worker finds it easy to showcase his art without the threat of art being stolen.
“Essentially, NFTs create digital scarcity,” says Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures.
What could be an NFT?
Anything that can be digitalized could be sold as an NFT. For example:
· Music
· Logos
· In-game items
· Digital posters
· Unique collections of digital art-work
So, if you can provide anything unique and digital, it could be an NFT.
Recently, Jack Dorsey the founder of Twitter sold his first tweet as an NFT for $48 million.
How does it work (that NFT thing)?
NFT is created by the same data programming as used for cryptocurrency. But an NFT, unlike, cryptocurrency is not divisible.
New to trading? Try crypto trading bots or copy trading
From a high level, NFTs are part of the Ethereum blockchain, and the ownership of an NFT is trackable by the Ethereum blockchain. So, if you buy an NFT then your unique id and address will assign to the token (NFT) and you can check your ownership of the NFT on the blockchain site.
One NFT can only have one owner at a time. Anyone who buys or sells that NFT could be tracked by his/her id that will be shown on the site, like this….
Ethereum
For instance, at this time when I am writing this article ONE ETHEREUM is 1,060.70 USD.
What is a Blockchain?
Blockchain technology is used to have secure and defused records of transactions. It is developed to store the transaction history of cryptocurrencies like bitcoin. It works by collecting information and spreading it on different networks to prevent the information from hacking.
As the name indicates it collects information to form blocks, when the block is filled, links it with a previously filled block forming a chain of blocks.
Marketplaces for NFTS
You may have a question. “Where to sell and buy NFTs” Actually there are a lot of sites but the popular ones are:
· Rarible
You can buy and sell NFTS on these sites.
The rise of NFTs
NFTs are not new — they have been here since 2014 — but, like a YouTuber who has been making videos for a long time then one of his videos gets popular and skyrockets its subscribers count, NFTs became popular in 2021 during the pandemic when every other company is digitalizing itself. There were more than 2.5 billion dollars in sales in the first 6 months of 2021.
Future of NFT
There are a lot of debates about NFT's future. Some say it is going to revolutionize the whole art world, however, others think it will fade away.
Recently, Bill Gates says, NFTs and crypto are 100% based on the greater fool theory.
Keanu Reeves was asked about NFTs, during one of his interviews about his latest movie Matrix, during which he just laughed at the idea.
On the other hand, some celebrities support NFTs.
According to High Snobiety, Justin Bieber spent $1.3 million to become a member of the Bored Ape Yacht Club. He bought one of the bored ape art from their collection.
For me, NFTs could become the central marketplace for digital artists. As it has gained popularity in the last few months, I think it is going to be the future of collectibles and arts.
Conclusion
So guys from this article What is an NFT? Explained you should be able to know the NFT thing. This is my first article about NFTs and I am going to write more about the digital world and technology. So, if you like my article do follow me, and if you have any kind of questions feel free to ask in the comment section.
Thank you.
