Non-fungible tokens, popularly known as NFTs, were among the most searched terms of 2021, beating Dogecoin, blockchain and even Ethereum in Google searches. The digital asset gained popularity after Christie’s auction house sold Beeple’s artwork for a whopping $69.3 million.
Even though the digital asset is gaining a lot of attention around the world, there are several people who do not understand the concept of NFT or what actually NFT is? Let’s first understand that!
NFTs are blockchain-based unique digital assets and like any other piece of property, these digital artworks can be bought and sold. But do not confuse them with cryptocurrencies, because one cannot use these digital artworks as a transaction medium.
NFTs can be thought of as certificates of ownership for virtual or physical assets.
Selling NFTs has been a lucrative business in the art world. Here are a few examples of popular digital artwork:
- Beeple’s “Everydays- the First 5000 Days”, sold for $69.3 million.
- 20-second video clip of LeBron James “Cosmic Dunk #29”, sold for $208,000.
- CryptoPunk, sold for $1.8 million at Sotheby
- Twitter CEO Jack Dorsey sold his first tweet as an NFT for $2.9 million.
How Does An NFT Work?
Now that you’ve begun understanding what is NFT, you should explore and learn about how NFT works.
Ethereum is considered to be one of the best networks for developing an NFT, as it can easily be reviewed by anyone. The blockchain network also helps the person or an entity in verifying and tracing the NFT, while they remain pseudonymous.
The unique identity and ownership of an NFT is verifiable via the blockchain ledger. When an artist chooses to mint their work and turn it into an NFT, they turn it into a digital collector’s item. That means, they mint a one-of-a-kind piece of content or share a limited edition of 25 prints to create digital scarcity — allowing their work to gain in value. If anyone copies that artwork from Google image, that person would not be able to sell the non-fungible token as their own work. Unless their copy is an NFT, it’s immediately identifiable as a fake — NFTs can only have one owner at a time, and each one is unique.
Final Takeaway
NFTs’ unique data makes it easy to verify and validate their ownership and the transfer of tokens between owners. In today’s time, the most significant use of NFT is in digital content, as it helps the content creators in claiming ownership of their content over the platform, on which it has been published. Apart from this, these digital assets can be used as gaming items, investment & collateral, and domain names.
