Non-Fungible Token NFTs - Non-Fungible Token What Is NFT? NFTs are the newest application of blockchain and cryptocurrencies. Billions o...
NFTs - Non-Fungible Token What Is NFT?
NFTs are the newest application of blockchain and cryptocurrencies. Billions of dollars have been invested in NFT this year alone, with more and more applications appearing every week. This article is about NFTs. I have tried to simplify a complex technology in simple terms so that even a non-technical person can understand what NFTs are all about and why they have become a hot topic this year.
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NFT, which stands for Non-Fungible Token, is a blockchain-based technology that prevents users from creating more than one copy of content. This feature of the blockchain ensures that there can only be a single copy of digital content. Blockchain ensures that the owner digitally signs the content using a cryptography algorithm and stores the digitally signed copy on a public blockchain.
This article talks about the fundamentals of NFTs and more. In this article, I will cover the following topics,
- What does NFT mean?
- Why would you want to buy or sell NFT?
- What are the most popular NFT projects?
- How is NFT different from cryptocurrency?
- What are the advantages of NFTs?
- How do NFTs work?
- What is NFT Art?
- What is NFT Crypto?
- Should I create my own NFTs?
- How to buy NFTs?
Everything You Need To Know About NFTs
On March 23, Jack Dorsey's first tweet posted on Twitter was sold for $ 2.91 million to @sinaEstavi. It was bought in a bidding process in which Justin Sun, founder of the Tron blockchain, offered $ 2 million.
The tweet was put up for sale on an NFT trading platform called Valuables that allows people to buy and sell tweets. The following tweet sold for $ 352.08 or 0.1771 ETH.
These were just tweets. What about other content like paintings, videos, photos, text, voice, and even music tracks? The answer is yes, any digital content can be converted to NFT.
What does NFT mean?
What does "buy" this tweet mean? In simple terms, it means that it is proof that the tweet is unique and is digitally signed and verified by the creator. This shows that Jack Dorsey's first tweet is now owned by @sinaEstavi as a collectible and that he can sell it to anyone whenever he wants and for whatever price he wants.
It is now stored in the form of NFT on a blockchain. By converting this tweet into an NFT (non-fungible token), @sinaEstavi has proof of ownership of this tweet and when it was purchased. In the future, if you want to sell it, you can transfer ownership to a new buyer.
Now let's compare this to the most famous painting in the world, the Mona Lisa by Leonardo da Vinci. Everyone knows that there is only one original Mona Lisa painting in the world. Because it is an original work of art by a master, the value of the original painting is much more than its copies.
NFTs are a similar idea, where "content" is digital. The uniqueness of the content is protected through the use of a blockchain in the form of NFT and the owner has publicly available evidence.
What does NFT stand for?
NFT stands for non-fungible tokens; tokens that are unique in themselves. NFTs are similar to a single work of art that does not have another duplicate copy.
The concept of NFT has been around for several years, but it was in 2021 that NFTs became insane and widespread. In 2014, Kevin McCoy and Anil Dash presented the concept of interchangeable and non-fungible blockchain markers at an event in
Why would you want to buy or sell NFT?
The purpose of buying NFT is like buying and owning a baseball card, autographed shirt, famous artwork, or vintage car. One purpose is to own it and have a good feeling about it, and the second purpose is to keep it and wait for its value to increase so that you can sell it and make a profit.
A photographer or artist may want to auction their photo or art as an NTF to earn some money. The buyer can relax and have the good feeling that there is proof that it is an original, and no one else can claim the photo or art they have purchased as NFT.
Now that you understand what NFT is and why someone would want to buy or sell NFT, let's look at some famous NFT applications that are already in the business.
What are the most popular NFT projects?
The following is a list of the top 5 NFT projects (not in any particular order) that are live and show good NFT use cases.
- NBA Top Shot
The NBA launched a trading platform in association with Dapper Labs called Top Shot that allows people to collect, buy and sell NBA highlights, photos and videos. A Lebron James NBA standout sold for $ 200,000.
Currently, a Kevin Durant dunk is called for for more than $ 1 million.
CryptoPunks developed by Larva Labs is a collection of 10,000 uniquely generated characters. No two are exactly alike, and each of them can be officially owned by a single person, and by using NFT stored on the Ethereum blockchain, one person has proof of ownership of that character.
Not only can you buy punks on this platform, but you can also sell the punks that you own.
Sorare is a platform for people to create their own fantasy football games, collect cards and trade them.
CryptoKitties allows you to collect, breed, and sell virtual digital cats. You can also breed virtual cats. Each cat on the platform has unique characteristics and abilities.
The platform is based on the Ethereum blockchain and uses ETH as a digital currency to buy and sell virtual cats.
Hashmarks allow art creators to sell their art and buyers to buy and own art on a blockchain. A piece of digital content in Hashmarks is called a Hashmark and each Hashmask is owned by a single user.
NFTs are stored on the Ethereum blockchain and hosted on IPFS.
How is NFT different from cryptocurrency?
Both NFTs and cryptocurrencies use blockchain technology to create tokens. Blockchain uses a cryptographically secure distributed ledger that is publicly available. To learn more about blockchain and understand the difference, see What is Blockchain?
A cryptocurrency is a "fungible" token. It means that a token is interchangeable or replaceable by another identical token or coin and there can be several tokens. For example, there will be 21 million Bitcoins once all Bitcoins are mined, and each BTC is equal to other BTC in value. That also means that a BTC is not unique. Like BTC, all cryptocurrencies like ETH,
NFT tokens are not fungible. That means that each token is unique and there is no other token like it. . They can be exchanged for other tokens or similar coins, but there is no duplicate token. It is like a unique work of art created by an artist that will have no duplicate copy. This is what makes NFT valuable. Once you own an NFT, no one else can own that exact one, and if someone wants it, they can ask for whatever price they want.
In the case of NBA Top Shot NFT, each highlight is unique and there is no other copy. Once you own it, you have the right to sell it for whatever price you want.
What are the advantages of NFTs?
The biggest use of NFTs is proof of ownership. If you like a character in a game and you don't want anyone else to have the same character, you can buy the NFT and own it.
For game creators, NFTs are a source of income. They can create unique characters and sell them for a price.
Traders can buy and hold NFTs and sell them when their price goes up.
Artists and musicians can convert their art and music to NFT and sell for a higher price.
How do NFTs work?
To understand how NFTs work, you need to understand their underlying technology, blockchain. Blockchain is a distributed ledger that is protected by cryptographic computer algorithms. A blockchain stores all transactions in a public ledger that is distributed over a network of computers called a node. Each participating node in a blockchain has the exact and complete copy of all transactions on the blockchain.
NFTs are stored on one of the popular blockchains that support NFTs like Ethereum and Stratis.
An NFT is created from digital objects such as photos, videos, content, and combinations of them. The process of creating an NFT is called minting and once an NFT is created, it is called minting. Some of the examples of NFT are art, pictures, videos, tweet copy, collectibles, sports cards, featured sports, and music.
The owner of an NFT owns the digital copy of an item that is stored on a blockchain. The owner of an NFT gains sole ownership of the item. Since NFT is on the blockchain, the data stored in an NFT can be customized.
It is up to the owner how he wants to sell the NFTs. It can have a fixed price or a bidding process. There are publicly available platforms (apps, websites) that allow individual artists to convert their digital content to NFT and sell it.
NFTs are purchased using a cryptocurrency such as ETH or STRAX, depending on the blockchain on which they are stored.
What is NFT Art?
One of the applications of NFT is NFT art. We just looked at an example from Hashmark, where an artist can purchase art from her as an NFT. Any artist can turn her art into an NFT that will be saved on a public blockchain and sold for a price. People can bid on art too.
Only one owner can own the art at a time. Payments are made in a cryptocurrency that is used to run the blockchain used. For example, NFTs stored on the Ethereum blockchain will require buyers to pay in ETH and NFTs stored on Stratis Blockchain will require buyers to pay in STRAX.
The most famous NFT is Beeple EVERYDAY: THE FIRST 5000 DAYS which sold for $ 69 million. The collection is an image of 5,000 images that have been taken each day since May 2007.
CryptoPunks is perhaps the most popular NFT application where there are 10,000 unique characters available and stored on the Ethereum blockchain with proof of ownership. Each character can be bought and owned by a single person at any time.
As you can see from the list above, the best CryptoPunks sell for close to $ 1 million or more.
What is NFT Crypto?
A cryptocurrency is used to buy and sell NFT. The cryptocurrency used for NFTs is called NFT Crypto. The most popular NFT crypto is ETH, a digital currency that powers the Ethereum blockchain. All NFTs stored on the Ethereum blockchain must use ETH to trade.
Should I create my own NFTs?
Can anyone create an NFT and sell it? YES. If you think you have unique digital content that someone might want to buy and own, you can create an NFT and sell it.
There are a few things to keep in mind when creating NFT.
First, you must be the original owner or creator of the content.
Second, before creating your own NFT, you need to really think about whether or not people really want this digital content and whether or not they would be willing to pay for it. If nobody wants it, it is useless to create an NFT.
Third, there is a cost associated with creating NFT. Since NFTs live on a blockchain, there is also a technical process involved. It is not as simple as uploading a file to cloud storage.
Fourth, you must have some understanding and knowledge of cryptocurrencies. All NFTs are traded in the form of cryptocurrencies. A cryptocurrency is the fuel that runs a blockchain and the cryptocurrency depends on the blockchain it uses for its NFT.
In theory, any digital content can be converted to NFT. But not all types of digital content make sense to convert to NFT. Keywords are "unique" and "desired". You can compare NFT with famous paintings that many art lovers want to have. The more original and unique the painting, the more likely it is to be in demand. One of the most famous paintings, Salvator Mundi by Leonardo Da Vinci, is priced at $ 450 million.
Some people buy art to own them, while others buy it to profit from them. The same applies to NFTs. Some people buy NFT to own it, but others buy to hold it and sell it when the price is right. For example, the NBA sells the highlights of NBA players as NFT. If you buy a player's dunk and that player wins NBA titles, the NFT will likely get a lot more than its asking price.
How to buy NFTs?
If you want to buy an NFT, there are several public platforms that offer to buy, sell and trade NFT. These platforms are called NFT providers. NFTs can be purchased using cryptocurrencies that are supported by NFT providers.
Before buying NFT, the first thing you will need is a digital wallet that allows you to store NFT and cryptocurrencies. Here's a surprise. When you buy and store NFT in a wallet, you are actually storing keys that are proof of ownership, not actual NFT. The actual NFTs (digital content) are stored on a public blockchain where anyone can see what key the NFTs hold.
First, you need to buy a cryptocurrency like ETH, BTC, and STRAX. You can buy these cryptocurrencies on popular crypto exchanges like Coinbase, Kraken, Binance.us, or Robinhood. These encryption exchanges allow you to use a credit card, debit card, or bank account to pay for the encryption.
Buying and selling on crypto exchanges is not free. There is a fee for each transaction and these fees can be from 1% to even up to 4%. So, do your own research before buying any crypto.
Once you have crypto, you need to transfer it to a private wallet where you can store it. This is the wallet that you can use to buy NFT.
To buy NFT, you must use a platform. Some of the popular platforms for buying and selling NFT are Nifty Gateway, SuperRare, Foundation, OpenSea, Rarible, and Mintable. There are some specialized platforms that only allow certain NFTs, including NBA Top Shot, CryptoPunks, CryptoKitties, and Hashmarks.
Here are some examples of NFT,
- Popular unique art
- Content from famous people, such as tweets
- Player Highlights, Signed Photos, and Unique Shots
- Video game characters
This article explains what NFTs are all about and why attention should be paid to this new use case for blockchain technology. We also learned about popular NFT platforms and how NFT can be bought and sold. Stratis Blockchain allows you to create NFT using C # and .NET.
References - https://en.wikipedia.org/wiki/Non-fungible_token, https://www.forbes.com/advisor/investing/nft-non-fungible-token/, https://ethereum.org/en/nft/
The information on this website is not intended to be financial, business, investment or other advice, and you should not consider the Article of the website as such. ArticleMaster.xyz does not recommend that you buy, sell or hold any cryptocurrency.
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What Is NFT? Everything You Need To Know About NFTs