The internet is going bananas over NFT. You might be seeing some pixelated JPEGs and GIFs floating on the internet that has human cartoon alterations was sold for some outlandish prices. So, what are NFTs? How do they work? why everyone loves talking about it? let find out.
Today we will be going to give you a simple understanding of NFT with various examples.
What are NFTs?
NFT – Non-fungible tokens are digital assets, This could be any digital goods, Artwork, Music, Collectible, Virtual estate, or a Cat GIF, etc Wait what !! (laughing),
Yes, a Nayan Cat GIF was sold for $600,000! it went for $600,000 wondering why would anyone want to pay $600,000 for a Cat.Gif sounds strange right! Well, there is another one Twitter co-founder Jack Dorsey the first tweet was sold to A Crypto entrepreneur Sina Estavi for $2.9million almost three million dollars, and he compared this to an infamous MONA LISA painting. but what does it mean?
Is the tweet is so priceless?
Who determines the value? So many questions right!
The plainest and simple explanation is anything and everything that exists in the digital space has a uniqueness or demands and having proof of ownership can be created as an NFTs.
How do they work?
In a world where every digital item can be faked so how important is authenticity? remember back then just to find the source of any picture origin we used to do a reverse Google image search now we have plenty of options so how NFTs is solving this enigma
Well, the answer is “Blockchain Technology” NFTs data is stored on the blockchain via smart contracts, stored on a network of computers. it means written and stored on multiple devices across multiple locations So no one person, company, government, authority, or entity can control it, thus making it impossible to change or alter. Each item can be traced back to its original issuer, NFTs are indistinguishable, So no two nft can exist on the same platform game or in the same collection, the unique data makes it different from any other NFT and renders a mark of authenticity “Certified’ without the need for third-party verification
For eg Artists can sell their artwork in digital form directly to a global audience, without any middle man like auction house or gallery, and can earn a better portion of the profit in fact royalties can also be programmed into digital artwork.
Who determines the value?
Holding a music record album signed by a famous music band? ,, A rare vintage pen your grandfather gave it to you? Or any item dear to you and is the only one on the planet according to you.
Can you decide the worth of it ?
Depending on that person’s beliefs, perceptions, or preferences it holds sentimental value, it has significance and it’s highly valuable because it is scarce there is only one of it.
That’s why it’s debatable as to how valuable NFTs actually are.I mean, an NFT is worth only as much as the next person is willing to pay for it.
But there is market for this called “Metaverse” where physical world meet the virtual or digital world very much similar to Stevan Spielberg movie “Ready player One” its the next iteration of Internet and we are moving towards it