Non Fungible Tokens – It’s Relation with Blockchain

Fugibility is a concept from the economics world. Defining fungibility as the ability to exchange one asset for another of the same type. For example, money is fungible. You and I have the same $20 bill in our wallets. Nothing would change if we swapped the bills. Our bank accounts would be unchanged. Read completely to understand about the Non Fungible Tokens definition and its working.

What is A NFT?

Unlike fungible tokens, NFTs contain a unique identifier as well as a record of ownership, which are both cryptographically protected. It’s impossible to copy or manipulate tokens, and because each token is unique, you can’t exchange one for another like money. NFTs can be exchanged for money.

From what we understand, NFTs are a bit like rocks: unique, but not especially desirable. There is however another interesting aspect to NFTs. Among other uses, digital certificates can be used to prove ownership of digital assets, such as works of art. These certificates represent ownership. Purchasing a NFT that is linked to a work of art is, in a sense, buying the work of art. While it is possible to copy the work itself, the token and its association cannot be replicated.

Check What is Digital Currency?

How do NFT’s work?

Our description of Non Fungible Tokens might sound similar to those familiar with cryptocurrencies like Bitcoin. They are both based on blockchain technology and thus share many characteristics with cryptocurrencies.

Blockchains are essentially digital ledgers that record transactions as a series of blocks. Cryptographic hashes are used to link each block to the previous one. Cryptographically linked records build up over time. A blockchain consists of thousands of copies that are spread across numerous computers. Due to the way blockchains work, which are distributed and cryptographically linked, data contained on them is difficult to change, making them a reliable way to store transactions without the need for centralized authorities.

What are Non Fungible Tokens used for?

NFTs can be used for a variety of applications, including digital arts and memes, as well as Nike’s virtual collectibles, Cryptokicks, and Cryptokitties. In-game assets are stored in NFTs by games companies. Across the pond, music video artist Grimes sold a 50-second clip for $388,000. “Perhaps most famously, Twitter CEO Jack Dorsey used an NFT to sell his first tweet for almost $3 million.”

What are your options for getting into NFTs as a creator? Firstly, you’ll have to create a digital asset and attach it to it. In order to store your NFT, you will have to choose a blockchain. It is the most popular and the most straightforward way to create Ethereum wallets hosted by one of the big cryptocurrency exchange platforms, such as CoinBase. In the final step, you will upload the asset to an Ethereum marketplace such as OpenSea or Rarible and connect your wallet. NFTs are traditionally sold through auctions, but you can also sell them directly to buyers.

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