Crypto

What are NFTs and why they are the future of digital creations

“Jack Dorsey sells his first tweet ever as an NFT for over $2.9 million”

“People have spent more than $230 million buying and trading digital collectibles of NBA highlights”

 “A Unique NFT for the Popular ‘Nyan Cat’ GIF Just Sold for a Whopping $560,000”

I know these headlines must have been blowing up your mind and one question surely arises: What exactly is NFT?

So NFTs stand for non-fungible tokens and before that let’s take a look at what the word fungible means.

Suppose that you have 10 coins and each coin values one rupee, however, you don’t want to carry these coins. So what you do is, you replace those coins with a single 10 rupee note and now you have the same amount of money in a different form. Therefore those 10 rupee coins were replaceable or fungible.

Fungibility means that we can replace an asset with another asset of the same kind.

Getting to what Non-fungible tokens are, as the name suggests they are non-replaceable.

Like we cannot replace a poster of the popular Mona Lisa’s painting with a wall decor poster of Mona Lisa’s painting, More like NFT is a digital certificate of authenticity.

NFTs can be anything digital, they can be art, music or NBA highlights, or that cat gif (I hate where this is going) but right now they are used more for digital art.

NFTs in the crypto world

Now you must be wondering that this cat gif and stuff has anything to do with cryptocurrency or blockchain?

As we know that the blockchain is a public ledger and any information that is stored in it cannot be tempered, Also this supposed cat gif was circulated to the whole internet so how can an individual buy the original one? So basically let’s say that you have the original Nyan cat gif and I pay you 600 there for that, okay my transaction is verified that yes I do have 600 to pay, alright cool.

Now in exchange for a digital certificate that says that I am the original owner of that gif you are paid 600 and the NFT, the token of that gif is transferred to me and stored in a public record, an unalterable public ledger or in a more technical sense, every NFT is a unique token on the blockchain. That solves the whole problem here that I am the original owner of that cat gif!

NFTs are non-fungible cryptocurrencies unlike bitcoin, they exist as a string of numbers and letters stored on the blockchain ledger containing information like who owns that digital asset, when it was sold, where it was sold, etc. This makes those digital creations unique and more valuable.

However, there is one more concern that not every NFTs verify that a person selling that digital creation is the original owner of it, especially in the online marketplace.

What’s the hype?

Talking about the crazy fad side of NFTs,

Like an animated Gif of Nyan Cat that sold for more than $500,000,

or musician Grimes who sold her digital art for more than $ 6 million or Christie’s sale of an NFT by digital artist Beeple for $69 million and NBA highlights of course.

NFTs are more than that,

They are a Decentralized marketplace that allows creators to make money directly from their work eliminating middlemen allowing them to interact and transact directly with their customers. Also because of their uniqueness, Upon buying them if you hold on to them, their value will increase over time.

One of the greatest advantages of the NFTs is that it allows content creators to retain their full copyright, therefore they can still generate revenue without giving up their copyrights.

Wrapping up all NFTs are Decentralized marketplace, Unique Collectibles which are Resell able.

Author

Bharat gandass

I am an expert technology advisor for start-ups predominantly in Blockchain and Security areas. I have done Masters in Business Administration (Finance and IB) and serving the IT sector from last 10 years.

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