What are NFTs?
NFTs stand for Non-fungible tokens. In short, NFTs represent digital or physical contents/Assets in terms of Ethereum Blockchain. Moreover, Non-fungible tokens come as a unique code that keeps itself safe from any sort of duplication. NFTs store unique information that is why this blockchain representation is termed as unique. One NFT is completely different from another NFT, as they are unrepeated tokens.
Non-fungible tokens are used to represent different kinds of objects and art. Even NFTs can also represent digital content and collectibles, such as photos, tweets, and so on. Did you know the popularity of NFTs has increased to a great extent? More and more people are getting interested and enthusiastic about Non-fungible tokens.
In other words, it is not possible to replace Non-fungible tokens with an identical item. That means NFTs are not mutually interchangeable due to their unique nature.
Each token or content belonging to NFTs is fully unique. And you already know NFTs are not replaceable. All these traits have made NFTs useless in terms of currency. However, when it comes to developing digital art, NFTs can be useful a lot.
How Do NFTs Work?
You might have heard about the Ethereum Blockchain. But did you know maximum non-fungible tokens come as a segment of this open-source blockchain? Although Non-fungible Tokens are supported by Ethereum Blockchain, they store additional information, and that is why NFTs have a different work structure than NFTs. Nevertheless, other blockchains can also come with their unique versions of Non-fungible Tokens.
Since Non-fungible Tokens are digital certificates, it is possible to buy or sell them like other precious items. Once an NFT is bought, the person gets a certificate with the security of Blockchain Technology. That is how the person becomes the owner of that asset, which has been uniquely represented by an NFT.
Non-fungible tokens can be created, sold, or bought by anyone. And it calls for no advance permission. Moreover, NFTs are stored in peer-to-peer networks in an encrypted form. That is why NFTs cannot be easily hacked or duplicated.
Non-fungible Tokens and Bitcoin both belong to cryptocurrencies. However, the main difference between them is the inability of NFTs to be used as a mode of commercial transactions. Whereas Bitcoin comes as a fungible cryptocurrency, NFTs are non-fungible.
Bitcoin is exchangeable, so the value of two bitcoins is equivalent to each other. That is why one can also trade Bitcoins. On the other hand, the value of two NFTs would never be equivalent even if they belong to the same platform. An NFT can be owned by only one person in the whole world at a time.
One can sell and buy NFTs for which Metamask can be installed. Once installation completes, the person can purchase Ethereum. Whenever the person comes across a website offering NFTs on sale, then the purchased Ethereum can be used to purchase a Non-fungible Token. NFTs would take some time to reach more and more people in the world.
Are NFTs Worth It?
It is difficult to predict the future of NFTs- But with rising openness in people to avoid duplicity, the Future of NFT looks great. However, one should think before buying and selling Non-Fungible Tokens.
You can take the example of Bitcoin here in that Bitcoin has become among the most popular digital assets in the world, although it was not so valuable a couple of years ago. Do you want to purchase expensive NFTs? Then, you must think twice about its future value and then proceed to the next step.
Wrapping Up
The best part of NFTs is that they are fully unique. For example, maximum objects around us are fungible, which means they can be bought by others as well.
On the contrary, NFTs are irreplaceable and non-exchangeable. These are present in a digital format only. One can buy an NFT that can’t be bought by anyone else in the world. For instance, artworks fall in the category of NFTs, and they cannot be replaced or duplicated.
Non-fungible Tokens have become the most advanced trend in the world of the blockchain. Although the future of NFTs is unpredictable now, it could appear as something revolutionary soon.
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NFTs: What Should You know About was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.