NFT stands for non-fungible token. Non-fungible means that something cannot be exchanged for another item because it is unique.
For instance, one piece of art is not equal to another both have unique properties, fungible items on the other hand can be exchanged for one. Another, for instance, one dollar or Bitcoin is always equal to another.
NFTs, are tokens that live on a blockchain and represent ownership of unique items.
Why is that helpful
Who owns A digital file is tricky because it can be copied and distributed effortlessly. So how can you prove who's the original owner when everyone has an identical copy of the file, an NFT solve this problem.
Imagine that you made a piece of digital art, essentially a JPEG on your computer. You can create or mint an NFT out of this, the NFT that represents your art. Contains a bit of information about it. Such as a unique fingerprint of the file, a token name, and a symbol. This token is then stored. Worked on a blockchain and you the artist become the owner. Now you can sell that token by creating a transaction on the blockchain. The blockchain makes sure that this information can never tamper with it also allows you to track who is the current owner of a token and for how much it has been sold in the past, it's important to note that the artwork itself is not stored within the NFT or the blockchain. Only its attributes such as the fingerprints or hash of the file, a token, name, and symbol, and optionally.
A Link to a file hosted on ipfs, Now, here's where NFT becomes weird when you buy an NFT, that represents artwork, you don't get a physical copy of it.
Confusion, most of the time, everyone can download a copy for free, the NFT only represents ownership and that is recorded in a blockchain so nobody can tamper with it. Some say that NFTs give you digital bragging rights to make it even weirder while the token owner owns the original Artwork.
The creator of the NFT retains the copyright and the reproduction rights. So, an artist can sell his original artwork as an NFT, but he can still sell prints now aside from digital art. And if these can also be used to sell concert tickets domain names, rare in-game items, real estate. And basically, anything that is unique and needs proof of ownership.
For example, the founder of Twitter sold his first tweet as an NFT. Anyone can see that tweet on her. His profile but now only one person can own it and that person paid over 2.9 Million dollars for it.
Why are some NFTs worth millions
While they're worth is determined by what people are willing to pay for it. If I'm ready to pay $100 for a particular NFT, then it's worth $100, prices are driven by demand. So, be careful, expensive NFT Worthless, if nobody wants to buy it.
How do they work Technically
NFTs are essentially smart contracts that live on a blockchain, in this case, the contract stores, the unique properties of the item and keeps track of current and previous owners and NFD, can even be programmed to give royalties to the creator.
Future of NFT
If you're not familiar with NFTs, you're not alone. This new technology is only just beginning to enter the mainstream consciousness. But even if you don't know what an NFT is, there's a good chance you'll be hearing a lot more about them in the near future.
NFTs are the way of the future because they decentralise commerce while increasing transparency. NFTs will be critical in allowing people more freedom to engage in peer-to-peer trade. NFTs can reduce dependence on intermediaries, allowing artists and creators to be more innovative and compensated more fairly. At its most basic level, this means that any item can now become an asset thanks to blockchain-based software that stores information about the asset on a ledger.
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