Are you a digital content creator looking to sell your products but not sure how to validate the ownership? Or looking to buy original digital assets with proof of ownership? Non-fungible tokens or NFTs might be a solution to this problem. NFT is a digital asset that cannot be either replaced or interchanged due to its unique properties. It was introduced to the market in 2015 and is growing its market dramatically today.
Let’s dive into 10 interesting facts you need to know about NFTs.
1. What is an NFT? 🧐
NFT or non-fungible tokens can be any digital asset such as GIFs, music, video, or audio or can be any real-world item such as signatures, legal documents, or just about anything which has an authentic certificate created by blockchain technology.
2. Fungible vs non-fungible? 💡
Let’s take money as an example of a fungible item as it can be exchanged for the same value. As an example say you have a $10 bill and you exchange it with your friend for five $1 bills and a $5 bill. The value will still remain the same. This is the same for cryptocurrencies that we use today.
But you can’t exchange NFTs in a similar way assuming it retains the original value because the authenticity is verified through a unique transaction hash. Non-fungible stands for anything that cannot be interchanged like an art, a song, or even furniture because they have unique properties.
3. Is it unique? 🔥
Yes, it cannot be forged or manipulated because it can be easily verified with the ownership of blockchain-based tokens. It is true that anyone can take a screenshot or copy the NFT art into the computer. But the original owner can be verified since NFTs are embedded on the blockchain.
4. Who owns it? 😵
A single person owns it at a time and allows them to store their ownership in a digital manner. Each NFT has a unique ID and metadata. Therefore, they cannot be replicated.
5. Who uses NFTs? 💻📱
Many people who engage in crypto trading and have an interest in collecting artwork use NFTs. The use of NFTs has helped content creators verify their ownership on public platforms and increase their profits.
6. What is NFT minting? 🪙
When you buy any existing NFT, that means the digital asset has been created by someone else. But say you have something unique that you wish to sell as a form of NFT, then we call it NFT minting. It is the process of creating a new NFT token. You can buy these tokens using cryptocurrency.
7. How does it work? 🤔
First, you need to select a blockchain technology you plan to use for your NFT. The most popular blockchain among creators is Ethereum. Secondly, you’ll have to create a digital wallet since you need some cryptocurrency to get started. According to Ethereum, smart contracts are used when minting NFTs to assign ownership and manage transferability. When someone creates or mints an NFT, they execute code stored in smart contracts that conform to different standards. A new block is created and information is added to the blockchain where the NFT is managed.
8. NFTs in the gaming industry? 🕹️
There are games referred to as ‘play-to-earn’ or simply known as P2E where players can buy unique NFTs that can be minted after achieving certain tasks. Another advantage is it allows you to recoup your money by selling the items for characters that you have collected when playing online games once you’re finished with them.
9. Can we buy NFTs? 💰
You’ll need a digital wallet that allows you to store NFTs and cryptocurrencies.
10. Can I make an NFT? 🤑
Yes, anyone can create digital art and turn it into an NFT on the blockchain. Then you can select any marketplace of your choice and put it on sale.
Popular marketplaces for NFTs
- OpenSea: launched in 2017, this is the largest NFT marketplace today.
- Nifty Gateway
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