We are all aware of the sudden NFT frenzy that has taken the digital market by storm. NFT or non-fungible tokens are becoming the new valuable assets as they let people tokenize whatever is unique. But what exactly is NFT? Here’s a deep dive into the world of NFTs :
NFTs are essentially tokens or Ethereum-based assets that let us represent the ownership of unique items. By the term non-fungible, it means that they are immutable and unique. At a particular time, NFT can have only one owner. They could be pieces of art, music, poems, or even real estate. How are they different from the day-to-day fungible tokens that we use? The fiat currency or crypto tokens can be exchanged for some currencies or items. This implies that they are defined by their value and not by their uniqueness. However, it isn’t the same for NFTs; their uniqueness solely defines their worth. Digital artists and musicians are making tons out of NFT by tokenizing their pieces of art.
How NFTs Work?
NFTs are different from other Ethereum tokens because they are unique and represent the ownership of one person at a time. An NFT could be anything, collectibles, videos, a piece of land, or even a signature. The ownership of the NFT is represented by a token that contains a unique ID and metadata that any other token cannot replicate. NFTs are generally minted with the help of smart contracts. Once they are minted, the code inside them starts to execute, and the information gets appended with the NFT. Each token is associated with a unique identifier and is directly linked to one address on the Ethereum blockchain. NFTs can be traded on any Ethereum-based blockchain.
Revolutionizing the Digital Art Space Through NFTs
The ownership of the NFTs is easily verifiable. Digital content, gaming collectibles, music, and art, are some use cases of NFTs. Per NonFungible.com, the sale of these NFTs amounted to a massive $2 billion in the first quarter of 2021. Back in June, Binance, one of the world’s largest cryptocurrency exchanges, announced its plan to launch its very own marketplace where users can sell or buy NFTs or non-fungible tokens.
A Chinese duo called TaMen used NFT to verify a US$23,000 dogecoin painting. Chinese artists Lai Shengyu and Yang Xiaogang, who form the Hunan duo, depicted how the new blockchain ledger technology can be used to authenticate and protect artists’ copyrights. Back in March, Beeple sold his tokenized artwork for $69 million, after which auction houses began hosting a plethora of NFT sales which resulted in skyrocketing prices. TaMen’s NFT is a physical artwork that is authentic, whereas Beeple’s JPEG is merely a digital painting. NFTs have proven to be beneficial for the digital creator’s space by maximizing their earnings.
