What is NFT? [Non Fungible Token]

What is NFT

NFTs (Non-Fungible Tokens), Bored Ape Yacht Club! “Cartoon pictures are selling for millions of dollars.” What? That was me sometime last year when I first heard of the NFTs.

It blew my mind that a picture anyone could screenshot had more value than the property value of the entire neighborhood and then some. I could either pretend like it’s just an Internet fad for rich people that has nothing to do with me, or I could actually use some of my time to study about this instead of scrolling on Tiktok all day.

The fact that I have started this blog means you can guess which option I chose. The latter one, I chose to study about NFT.

What is NFT?

NFT stands for Non-Fungible Token. Right, that makes it clear, coz everyyyyoneeee knows what Non-fungible Token means. (sarcasm)

(This is why I started this blog, cause most blogs on the internet assume you will just get it if they stretch three letters into a sentence.)

What is a Fungible Token?

A token is an object that represents something else, such as another object (either physical or virtual). Physical money, cryptocurrencies are fungible. For example, A dollar is always equal to another dollar, or a bitcoin is always an equal value to another bitcoin. Cryptocurrencies are fungible and completely virtual, which makes them a secure* medium of transaction in the digital economy.

Let’s come back to NFTs.

NFTs or Non Fungible Tokens are unique and irreplaceable, which means it is impossible for one NFT to be equal to another. In the virtual world, they are as unique as your passport, or your fingerprint.

NFT is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger. NFTs use a digital ledger to provide the public certificate of proof of ownership. However, the digital file that’s been made into the NFT can still be shared or copied on the Internet as you would do with any meme ever.

The ownership of NFTs is not bounded by any legal body. Each NFT ownership is authenticated by the digital signature of the digital files. NFTs function like crypto tokens but they are not fungible (interchangeable), and that is what differentiates NFTs from blockchain cryptocurrencies like Bitcoin.

Non-Fungible Tokens are digital representations of assets. NFT assets could be anything from paintings, images of physical objects, Gifs, trading cards, and even tweets.

What’s available in the NFT market?

As mentioned, NFTs can be anything from digital art, paintings, writings, cards, tweets, and more. Basically, if you can convince people to buy it, the NFT market will eat it up. Jack Dorsey sold his first-ever tweet for $2.9 million dollars as NFT.

Right now, as we head into the year 2022, the excitement around digital art has carried off from its popularity in 2021. 

Why do you need NFT when you can screenshot it?

We have heard this argument and we might have even made this. This might be a generational thing. Remember when people over a certain age struggled to understand the concept of having a cellphone, or Email, or Facebook, or NFT. Ouch! I felt that too, which is why I am pulling my hair out trying to understand NFTs, and hopefully do a better job of explaining than most of the Internet.

I guess a simpler way of trying to understand NFT is acknowledging the fact that the world we know right now is changing. In other words, the internet we know as it is changing, evolving, and it’s happening fast.

Here’s a basic comparison between the NFT internet and the Internet today.

NFT InternetInternet Today
No two NFTs are the same. NFTs are digitally unique.A copy of a digital file like a .png, .jpg, .gif, .mp4, or .pdf is literally the same as the original.
Every NFT has an owner, and the certificate of authenticity or proof of ownership is available on the public record for everyone to verify.There’s no publicly available ownership of digital items. For eg, if you create a pdf at this moment and save it, it’s stored on a server (not controlled by you).
NFTs are compatible with anything built using their parent crypto. For eg: An NFT ticket for an event built using Ethereum or Solana can be traded for something else on Eth or Sol marketplace. You could trade in your NFT ticket for a piece of art.If you purchase a ticket on the Internet today, there is no marketplace for you to trade in that ticket for anything. A new platform and infrastructure would have to be built for your ticket exchange.
Content creators can sell their work anywhere and can access a global market.The closest thing creators can do today is share or stream their art on social media, but u have to rely on the infrastructure and distribution of the platforms they use.
Creators can retain ownership rights and claim resale royalties of their work.Music streaming services, book publishers, etc, retain the majority of profits from sales.
NFTs inspire new ways of using your work. For eg, you could use the digital artwork you own as collateral for a decentralized loan.Nothing of that sort is possible on today’s internet.
Difference Between NFTs and the Internet today

Most NFTs are based on Ethereum

Most NFTs or at least the popular ones right now seem to be on Ethereum, and the main reason is that Ethereum was among the first ones to do it. There are other blockchains and cryptos which can be used to create NFTs. Other popular tokens used to purchase NFTs include dai (DAI and Solana (SOL).

What is NFT Marketplace?

NFT Marketplaces are the platforms specifically designed to allow users to create (mint), buy, and sell non-fungible tokens in the form of digital assets like art, tweets, written word, virtual real estate, and more. Think of NFT marketplace like eCommerce websites like Amazon, but specifically for NFTs (digital assets).

NFT marketplaces like OpenSea let your imagination run free regarding what’s possible to mint as an NFT. Then there are other NFT platforms like SuperRare, which is reserved for high-level artists.

If you want to learn more about the best NFT marketplaces on the internet today, and which one’s right for a newcomer like you, check out our list of 10 best NFT marketplaces.

Are NFTs the future?

I first heard about NFTs last year. I have to be honest, at first, I thought it was one of those internet fads or online gambles for the mega-rich. How could I not think that? Every news outlet or Instagram page covered NFTs as some sort of secret that was sold around for $69 million. 

However, as I have been reading more into the topic, I am reluctant, but I think this is where we are headed. With companies like Marvel, Nike, Adidas, Facebook, and many more jumping into the blockchain world, minting their NFTs and whatnot, we broke simpletons can’t hide away from the NFT world anymore.

One way or another, virtual currency, the virtual universe (metaverse), and virtual finances (NFTS, crypto, and more), are all going to be a reality.

The best I can do for you is ask you to stick around for more content about NFTs. Nftstudy.net will cover everything you need to know about NFTs in the coming days. Who knows? One of you will be a millionaire through the information on this page and buy me a drink.