Everything You Wanted To Know About NFTs But Were Afraid To Ask
It can be challenging to keep up with the dazzling array of new information on the blockchain that keeps coming at us. From the highs and lows of Bitcoin pricing to a meme-inspired Dogecoin that’s suddenly turned into the best investment of 2021 and so much more, you’d be forgiven for missing out on an important piece of blockchain asset called non-fungible tokens (NFTs)that has taken the artistic world in particular by storm. Here’s everything you need to know about NFTs, told from a layman’s perspective.
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What Is NFT?
Non-fungible sounds like a word you may not have heard before so let’s break that down first. A fungible asset is anything that can be exchanged with units, like currency for example. You could exchange a 10 INR bank note with two INR 5 coins that would have the same value.
NFTs, on the other hand, cannot be exchanged for anything else. Instead, these can be compared to the graduation certificate with your name on it and belongs only to you. When someone buys an NFT, they have possession of that item even if it doesn’t belong to them physically. This could be a painting, a video clip or a popular tweet, or even a digital coupon.
NFTs are widely being touted as the digital alternative to collectibles, especially in the art and pop culture universe.
How Does It Work –
Okay, so maybe you’re still not clear about NFTs. Let’s try to understand it through its application further.
As a buyer of NFT, you have the entire range of digital assets to choose from, be it video games, digital artwork, logos, photos, animation, music, video clips, and more. Getting an NFT basically leads you into the world of blockchain and cryptocurrency as it relies on the decentralised power of blockchain technology to verify its authenticity.
In effect, buying an NFT means purchasing a public proof of ownership over a specific digital asset that makes it virtually impossible to hack into. This is because NFTs are protected by the same robust framework that powers cryptocurrencies.
The result? When you buy an NFT, you get a digital asset with a certificate of authenticity plus legal rights all rolled into one.
More On NFTs –
First things first, you might own a digital asset, but that doesn’t make it difficult for anyone else to replicate or pirate. The NFT gives you ownership of the media file in question, unlike pirated versions, where they can make copies and enjoy the digital asset in any way they feel free.
Also, a particular cryptocurrency has the same price at the same time. However, the price of NFTs doesn’t follow the same rule and can be arbitrarily set higher or lower, depending on its demand.
Second, most NFTs are currently part of the Ethereum blockchain. Ethereum is a cryptocurrency, like Bitcoin or Dogecoin, and its blockchain can store extra information that supports NFTs. Other cryptocurrencies are joining the bandwagon as well but the gold standard today is still Ethereum.
Just a day ago, Binance, the world’s largest cryptocurrency exchange, announced the launch of its own NFT marketplace in June 2021. The marketplace will be powered by the company’s blockchain infrastructure, Binance Smart Chain, that comes with a lower fee structure where creators get to pocket 90% of the total sales amount. This has the potential to shake up the nascent NFT world.
If you’re feeling left out of all the action, don’t worry. You, too, can be a part of the growing NFT movement in India by registering yourself on WazirX’s NFT marketplace.
NFTs also aren’t sold on cryptocurrency exchanges such as WazirX. Instead, you will find them on dedicated digital marketplaces such as WazirX NFT Marketplace, Openbazaar for example.
Popular NFTs To Date –
Artist Beeple’s first 5,000 “Everydays,” a series of digital drawings he had been creating since May 1, 2007 holds the record for being the most expensive NFT to date after selling for a whopping $69 million. Other notable NFTs sold so far include Twitter CEO Jack Dorsey’s first tweet for $2.9 million, Rick and Morty’s ‘The Best I Could Do’ artwork for over $1 million.
As you can see, just a simple introduction to NFTs has a wealth of information for you to dive into. We’ll be back with more detailed stories from the world of Cryptocurrencies and NFTs soon. Until then, we hope you read and share this piece with your friends.
This is a partnered post.
First Published: Apr 30, 2021 3:53 PM IST