NFT and how does it work
NFTs are a relatively new phenomenon, but are increasingly making headlines. The cost of unique non-fungible tokens exceeds tens of millions dollars. The new crypto trend continues to actively disrupt the market, attracting more and more people to invest in it, as well as attract artists to make a shift towards digital art.
Want to find out what an NFT is and how to use it or maybe how to get NFTs by playing your favorite games. Buckle up, my friend! We’ve prepared a quick article which will help you get familiar with a new trend in blockchain.
What is NFT?
The NFT (non-fungible token) is a type of cryptographic tokens, each instance of which is unique (specific) and cannot be exchanged or replaced with another similar token, although usually tokens are fungible by nature.
Each of the NFTs exists in a single copy, it cannot be divided, and all information about its author and buyer, as well as all transactions with it, are securely stored in the blockchain. The NFT contains the digital object itself, information about the creator of this object (this is how NFTs help protect copyrights), and data about the owner, namely, their wallet number in the Ethereum system (a cryptocurrency and blockchain platform). Because at a very high level, most NFTs are part of the Ethereum blockchain.
Can you turn an item into NFT?
NFTs can really be anything digital (such as drawings, music, videos etc.), but a lot of the current excitement is around using the tech to sell digital art.
How do digital objects turn into NFTs? To create a token, you will need a wallet in the Ethereum, Polygon or any other blockchain system, as well as a file with digital content. Just create what you want to be turned into a digital asset and add a file or files to it in any of the available formats. Each file needs to come up with a name and, preferably, a description. Then, you need to pay a commission for placing your token on the marketplace.
Non-fungible tokens use ERC-721 standard and wide-range of smart contracts that allow you to add detailed attributes such as the identity of the owner, rich metadata, or secure links to files. The ability of NFTs to consistently prove digital ownership is a major advancement for an increasingly digital world.
NFTs can represent digital collectibles like physical card collections, however in a completely digital format.
Eminem, Don Diablo, The Weeknd, Aphex Twin, Kings of Leon and Snoop Dogg to name a few have already premiered their own NFT collections in 2021 and the list keeps growing. Don Diablo for example sold the first-ever hour-long concert NFT for 600 ETH, or at the time of writing approximately $1.2 million. Snoop Dogg dropped a photo collection ‘A Journey with the Dogg’ which brought together Snoop Dogg’s memories from his early years.
In February 2021, a LeBron James slam dunk NFT card on the NBA Top Shot platform sold for $208,000.
Meme’s have always been a popular way to carry a message. Now the owners of the original images are cashing in on their legacies. Zoë Roth, now 21, became an internet hit when she was pictured aged four standing in front of a burning building with a devilish smirk on her face. Now, the woman in the viral meme has sold the original photograph for $473,000.
In addition to digital collectibles, NFTs can be used for digital assets that need to be distinguished from each other to prove their value or scarcity. They can represent everything from virtual land parcels to works of art and property licenses. They are bought and sold on NFT markets. Dedicated marketplaces such as OpenSea and Rarible have dominated this area so far, some leading cryptocurrency exchanges have begun to actively explore this space.
What's the difference between downloading the file a person paid millions of dollars for and free download of this file by others?
There is no difference. You can copy a digital file as many times as you want, including the art that’s included with an NFT.
In many cases, the artist even retains the copyright ownership of their work, so they can continue to produce and sell copies. But the buyer of the NFT owns a "token" that proves they own the "original" work.
Some people compare it to buying an autographed print. downloading the same file the person paid millions of dollars for.
How to buy NFTs?
If you’re into start your own NFT collection, or you whether you want to buy or sell your tokens you’ll need to acquire some key items:
First, you’ll need to get a digital walletthat allows you to store NFTs and cryptocurrencies. You’ll likely need to purchase some cryptocurrency, like Ether, depending on what currencies your NFT provider accepts. Then you need to find a marketplace where you could manage all your business. Currently, the largest NFT marketplaces are: OpenSea.io, Rarible, Foundation.