What are NFTs? This is a question that many people are asking, as this new technology is still in its early days. NFTs (or non-fungible tokens) are a new type of digital asset that is quickly gaining in popularity. These tokens differ from traditional cryptocurrencies in several ways. Unlike Bitcoin or Ethereum, which are fungible, NFTs are unique and cannot be replaced by another token with the same value. This makes them perfect for digital art and other creative applications. In this blog post, we will explore the origins of NFTs and discuss some of the exciting uses that they have already seen!
What is a Non Fungible Token (NFT) ?
Let us break down the words Non-Fungible Token. Non-means not and Fungible means that all items of a particular type are identical. So, in the simplest sense, a non-fungible token is something that is not identical to any other item. This could be anything from a digital asset like a picture or video to a physical object like a diamond.
Let’s relate this to a dollar note. A $100 note in your hand can be interchanged with another $100 note from your friend. Hence, the dollar note is interchangeable/Fungible.
Whereas, take the example of a unique painting, say, Mona Lisa. This cannot be interchanged for any other art as it is unique. In this case, The Mona Lisa is Non-Fungible and unique. When an art form of an artist is Tokenized in a blockchain, it is called a Non-Fungible Token.
NFTs help to solve some major issues faced by artists (in terms of their art form) such as:
- Not being able to prove ownership.
- No Royalty or Credit could be claimed.
Artists could convert their artwork into digital tokens and add it to the blockchain which would help prove absolute ownership with the help of a public distributed ledger.
The key advantage of NFTs is that they are uniquely identifiable. This makes them perfect for digital art, collectibles, and other applications where authenticity is important. In the past, it has been difficult to track down digital assets after they have been sold or traded. With NFTs, each asset can be traced back to its original owner. This could have a major impact on the way we buy and sell digital goods in the future.
How does it work?
NFTs run on blockchain technology. Ethereum is currently the most popular blockchain that runs NFTs.Other than Ethereum Blockchain, it also runs on Polygon, Binance Smart Chain, etc. NFTs are created by minting them on a blockchain and listed on the Primary market where they are given to the public directly from the company creating them. After Minting, it would be listed in secondary markets such as Opensea where everyone could buy and sell NFTs.
Rise of NFTs
NFTs are still in their early days, but they have already seen some amazing applications. In the next section, we will explore some of the most exciting uses for NFTs that have been developed so far!
Some of the most exciting uses for NFTs include:
One of the earliest and most popular applications for NFTs is digital art. This involves creating artwork that exists on the blockchain. By using NFTs, artists can create pieces that are unique and cannot be copied or replaced.
Another exciting use for NFTs is as collectibles. This involves creating digital objects that can be collected and traded like traditional collectibles. One of the early pioneers in this area is Cryptokitties, a game where players can collect and trade digital cats.
NFTs are also being used in gaming applications. These tokens can be used to represent in-game assets such as weapons, armor, and other items. By using NFTs, gamers can own these assets in a way that is similar to owning physical objects.
These are just a few of the many exciting uses for NFTs that have been developed so far. As this technology continues to grow, we are sure to see even more innovative applications!
To conclude, Non-Fungible Tokens are a unique and exciting new technology that is quickly gaining in popularity. These tokens differ from traditional cryptocurrencies in several ways. Unlike Bitcoin or Ethereum, which are fungible, NFTs are unique and cannot be replaced by another token with the same value. This makes them perfect for digital art.