Recently, digital collectibles have exploded in popularity because of NFTs. You’ve probably seen people on social media feeds talking about NFTs.
NFT’s can be confusing to understand for someone who is hearing them for the first time.
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Then what’s the heck are NFTs
NFT means Non-Fungible Tokens. These are basically blockchain-based records that uniquely represent a piece of media.
We could define Token as a “contract” in which it is stipulated that a person owns a unique and irreplaceable copy of a digital asset, along with the asset.
Fungibility means an interchangeable item as long as it retains its original value
On the other hand, Non-Fungible is the direct opposite. It means cannot be interchangeable because it possesses a unique property or is rare.
The ownership of these assets is recorded on a blockchain. NFTs are kept in the same blockchain logs as a cryptocurrency called Ethereum.
How exactly do NFTs Work
NFTs are created or “minted” on a blockchain. Anything can be minted on the blockchain from an art piece, audio to gifs.
Most of the NFTs are bought and sold online with Ethereum cryptocurrency. This is because the majority of NFTs are a part of a blockchain system like Ethereum. One can say that the Ethereum blockchain itself supports NFTs.
Why are NFTs such Expensive
Anyone can view the individual images—or even the entire collage of images online for free. So why are people willing to spend millions on something they could easily screenshot or download?
Because an NFT allows the buyer to own the original item. Not only that, it contains built-in authentication, which serves as proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.
Examples of NFTs
- Gaming Items - NFTs have garnered considerable interest from game developers. NFTs can provide a lot of benefits to the players. Normally, in an online game, you can buy items for your character, but that’s as far as it goes. With NFTs, you can recoup your money by selling the items once you’re finished with them.
- RTFKT’s digital sneakers - RTFKT is making big waves in fashion. Even though the people that buy his NFT sneakers won’t ever be able to wear them, they’re still willing to pay upwards of $10,000 for a pair. In the March of 2021, RTFKT sold a series of sneakers that he made with another artist called Fewocious—they managed to collect $3,1 million in sales in a matter of minutes
What you need to get started with NFTs
To interact with the marketplace, you would need to own a crypto wallet like metamask. It acts as your account, profile, and wallet in the web3 world including these marketplaces.
Conclusion
While NFTs is still a foreign concept to most of us, some of the above examples above push the boundaries of our understanding of ownership and alternative payment method. Some of them are purely marketing stunts, others truly charitable acts.
It appears that NFTs are here to stay, and it’s our responsibility to make an effort to understand this odd, new phenomenon.
I would love to hear your take on NFTs, was this article helpful? Do you want me to write more articles about web3? Leave a comment or ask any questions.
Originally published at melbite.com/what-do-you-understand-about-nft
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Top comments (6)
An NFT allows the buyer to associate themselves, with a URL, to a copy of the item.
There's still no such thing as an "original" item with digital copies. The copy on the author's drive is older but identical to the copy referenced by the URL, for example.
Because people see intangible things as an investment and want to create money from nothing, a.k.a. the Greater Fool Theory. Nobody wants a bad picture of a monkey for a zillion bucks; they hope to sell it to someone else later and that it'll be famous because it was an early example of an NFT and is distinctive enough to be easily recognised. This is not particularly different to other features of capitalism.
If you have a reproduction of a Van Gogh which is so close to the original - say, it's been created by a Star Trek replicator - that even the experts can't tell which one is which, an NFT would be the way to tell who owned the original... provided no bad actor switched the URL when you weren't looking, of course.
These are worthless as the game gets older and eventually shuts down. The only way selling them works is if you get out of the game early. It's almost like there's a bubble!
Wow!, A great and detailed explanation.
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I'm sharing an article about web 3 in general including NFT mention
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Metapunk Forem
Thank you for sharing this!