What is an NFT, Point of NFTs and How does it Work

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WHAT IS AN NFT?

A Non-Fungible Token is a digital asset that can be split, assigned a unique identity and used in place of a traditional fungible token, such as Bitcoin or Ether. Unlike fungible tokens, which are indistinguishable from one another, each Non-Fungible Token possesses an individual set of characteristics that make it unique and distinguishable from other tokens. Examples of these characteristics include colour, style, fabric, and even smell. The possibilities for Non-Fungible Tokens are virtually limitless, and their application will be widely-applicable across a broad range of industries and use cases.

An NFT is connected to a decentralised application (dapp) on the Ethereum blockchain, allowing users to interact with the platform’s functionality.

 

Although Collectibles are a relatively new concept in the world of cryptocurrencies and are a growing category of dapps that are being built on the Ethereum blockchain, it is getting very popular with time.

How do NFTs work?

 

As mentioned earlier, a non-fungible token is a digital asset that is unique, unlike traditional cryptocurrencies. It is similar to a cryptocurrency in that it is a digital asset, but it is different in that it is designed to be unique, representing a single unique asset (e.g., a digital painting). For example, a non-fungible token could represent ownership of an item, such as a digital painting.

NFTs are issued by the NFTs network. The NFTs network is a living ecosystem. It’s a place where NFTs can be created and traded. It’s also a place where NFTs can be used to interact with the Ethereum blockchain.

What’s worth picking up at the NFT supermarket?

 

Shop around on the NFT supermarket shelves and you’ll notice something interesting: there are a lot of products that are only worth a single unit. For example, if you see a pair of boots for sale, you can probably assume that each boot is unique and can’t be replaced with a different pair. However, some products on the market are manufactured in large batches and are therefore considered fungible. But what exactly is the difference between fungible and non-fungible, and which type of product is more likely to succeed in the future?

 

Quite obvious are the non-fungible ones. The ones that are rare and unique, get the biggest share of “money”.The unique and rare the asset, the higher the value.

 

So, this might be a good time to stop and smell the NFTs. The market for digital collectibles — things that can be bought, traded and displayed — has been expected to grow from $2 billion in 2018 to $22 billion by 2022, according to research firm Juniper and to be very frank, this is just the beginning. 

 

What’s the point of NFTs?

 

We’re currently in the early stages of the digital-collectibles market, and the market is beginning to shift. The most popular items at the moment are virtual in-game objects, such as Fortnite’s V-Bucks and the League of Legends’ skins. But there is a lot more to come, people are starting to trade real-world objects with the help of NFTs. So it’s huge.

Conclusion

 

NFT is a massive topic and we have just explained the basics. In the upcoming blogs, we plan to explore NFT to the fullest.

 

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