Understanding NFT: Everything you Need to Know about Non-Fungible Token
Non-fungible token 101 - Beginners Guide
What is NFT? Is it another form of cryptocurrency in the making? I hear of NFT being sold for thousands and millions of dollars. are Nft’s digital images? Can someone just tell me what the heck is an NFT?
These are many more questions we know you must be asking, we glad to make a beginners article on everything you need to know about NFT’s.
What better way to leave you scratching your head and wondering, “Um… what the hell is going on here?” than a lot of of blockchain notifications and news?
That’s the sensation likely you must have been experiencing lately.
Have you heard about Grimes receiving millions of dollars for NFTs or about Nyan Cat being sold as an NFT.
Let’s not even go further, what about the founder of Twitter who put a tweet for sale as a NFT.
Funny enough, while we were yet compiling this publication we still heard about individuals spending a huge amount of money for rock clip art, we are still even baffled as to how much higher can an NFT be sold for.
You might be wondering: what exactly is an NFT?
We believe we’ve figured it out after countless hours of researching. So here we are with WHAT EXACTLY IS AN NFT?
let’s start with the fundamentals, like we always do. so;
Who is this article for?
This article is specially curated for a total beginner in an NFT environment, who has no idea to what an NFT is, What NFT’s stands for, How NFT’s are created, What smart contracts are, the uses of NFT’s, the history of NFT’s, how NFT’s affect the cryptocurrency space, the advantages and disadvantages of NFT’s, and many more.
Although if you already know the answers to some of the above questions but you want to polish your knowledge on everything you need to know about NFT’s, you are welcome to read.
Bear in mind that at there are some key take away that you are expected to remember by the time you are done with this article.
Key Take Away
- NFT’s are a way to represent anything unique as an Ethereum-based asset.
- NFTs are giving more power to content creators than ever before.
- NFT’s are powered by smart contracts on the Ethereum blockchain.
- NFT’s rely on scarcity to increase worth.
- NFT’s can be created by almost any one.
- NFT’s can be used to represent any form of Media property.
Introduction to Non Fungible Tokens(NFT)
It’s no news that most businesses and systems need to make sure that people own both physical and digital things.
we already know that people have been collecting rare and valuable things like art, jewelry, and even land for as long as we can imagine long.
There are now a lot of things people collect, like autographed memorabilia, trading cards, and a lot more.
Stay with us, we are driving somewhere.
In the past, these assets that are collected were owned and authenticated by paper or centralized digital systems, however, these systems were inefficient and could slow down the transfer of assets thereby leaving room for fraud.
What are Non-fungible tokens?
Some people call them “NFTs,” which stands for “Non Fungible Tokens.”
NFT’s are blockchain based tokens that represents a unique asset like an art piece or digital content.
When you think about an NFT, you can think of it as a digital certificate that proves that you own and are the rightful owner of an asset, whether it is digital or real.
What does NFT stand for?
NFT simply stands for non-fungible token.
Generally speaking, it was developed using the same type of programming as cryptocurrencies, such as Bitcoin or Ethereum, but that is just where the similarities between them end.
Currency in the form of physical money and cryptocurrencies are both “fungible,” which means that they may be traded or exchanged with one another.
They’re also the same in terms of value.
For instance, one dollar is always worth another dollar, and one Bitcoin is always worth another Bitcoin, and so on.
Due to this fact, cryptocurrency is fungible and it has been assumed to be reliable method of performing transactions on the blockchain network.
NFTs, on the other hand, are unique.
Each NFT is protected by a digital signature, which makes it impossible for them to be swapped for or equated with another (hence, the word “non-fungible”).
So, to a newbie,
What is an NFT?
As the term “non-fungible token” implies, NFT is a digital asset with no counterparty, which means it is unique to the individual who has it.
The most popular NFTs right now include artwork and music, but they can also include movies and even tweets, which is becoming increasingly common these days.
If you own something in the real world, you can easily use a non-fungible token (NFT), which is a unique digital asset that shows that you own it.
We can not talk about NFT’s without discussing what smart contracts are all about.
What is a smart contract?
A “smart contract” is a code that runs in a certain way in the context of a blockchain network.
Each member of the network checks the state-changing actions that a smart contract’s code makes.
Smart contracts can be said to be the way that developers can create and use tokens on a blockchain network.
There are many ways to use tokens, one of the way is that smart contracts have the ability to store small amounts of information in common data structures.
This is important in cases where tokens and owners are linked so that you can keep track of who owns a property.
History of NFT
On the Ethereum blockchain in the year 2017, Dapper Labs made CryptoKitties, which was the very first real example of a digitally verified and transferable non-fungible token that could be used to buy and sell things.
These “non-fungible tokens,” or NFTs, were collectible game characters that each have a different set of attributes that make them more or less rare.
In order to make sure that each Crypto Kitty is real and that its owner is who they say they are, they used the native digital signature scheme on the blockchain.
Furthermore, there is less friction and risk of fraud when these assets are being sold to a new owner.
In the past, Crypto Kitties made the idea of non-fungible tokens (NFTs) popular. But today, NFTs are being used for a wide range of things as we will discover shortly.
There’s no where you will be able to understand the NFT concept without first knowing the difference between a fungible and non-fungible asset.
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