What is NFT? Things to know about it

Introduction:

So you might be wondering what is NFT right? Let us know first what it stands for, so NFT stands for Non-Fungible Token. The term Non-Fungible is used for those things that are unique and can’t be exchanged. Moreover, take the example of the most popular cryptocurrency i.e. Bitcoin. So, the question that may arise in your mind is that Bitcoin Non-Fungible? Most probably the answer is Big NO. Every cryptocurrency including Bitcoin is Fungible. Means one Bitcoin is traded for another and you will get the exact same thing.

Moreover, another example of a Fungible item is money. Let’s say if Person X lends Person Y a Rs 50 bill. Then the Person Y can pay Person X with a different Rs 50 bill. Still, the value remains the same. Alternatively, Person Y can give two Rs 20 bills and a Rs 10 bill, then also the value remains the same. However, when talking about Non-Fungible assets Your house can’t be exchanged with the house of another person in the same neighbourhood. It does not matter you both have the same number of rooms in your houses. It can’t be exchanged, ultimately making it Non-Fungible.

I hope now it’s crystal clear to you about the difference between the terms Fungible and Non-Fungible. So, now let’s have a deeper look into the Non-Fungible Tokens in the next upcoming section of this blog post.

What NFT can be?

The NFT can be anything in digital format be it drawings, a music file, GIFs, or even it can be a tweet of someone. Yes, you read that right. The NFT or Non-Fungible Token is a unit of data stored on a blockchain. In simple words, a Blockchain is a kind of database. But it differs from a typical database, mainly in the way of storing data. In Blockchain the data is stored in blocks and thereafter it is chained together. The majority of NFT platforms have Ethereum Blockchain support, which is the blockchain of Ether cryptocurrency.

Now let’s see the most popular NFTs ( Prices are included in the captions)

As you can see in the above images, particularly NFTs artwork were sold with millions of dollars price tag. Not only that Twitter’s Founder and CEO, Jack Dorsey has created NFT of his first tweet “just setting up my twttr” and auctioned it. Which was bought using the cryptocurrency named Ether and had the final bid of a whopping $2.9 million.

How To Create Your Own NFT?

It is not hard to create NFT as someone would think. Firstly you have to pick a unique artwork, consists of GIFs, texts, audio or video. The more unique an artwork will be, the much better. Then after finalizing your artwork, the next step you have to take is to select a particular blockchain. As I have mentioned earlier majority of the NFT platform is based on Etherium blockchain. So you have to use Ether cryptocurrency for the purpose of NFT.

Let us assume that you have selected Etherium, and then you should have some cash in your hand. I am saying this because listing NFT in the marketplace costs money. If you don’t want to pay for the listing then you can go with Open Sea. In Open Sea the process is free but at least you should have the wallet in order to create an account in it.

Other examples of the NFT marketplace includes CryptoPunks, Axie Infinity, Rarible, NBA Top Shot, Foundation and Sorare. Every marketplace has a more or less similar process of creating an account on it. Once you have created an account and uploaded your item to the marketplace and successfully created your token jump to the next section of this blog post.

How to buy and sell NFT?

In order to sell your NFT, you have two options, first, you have the option to go for an auction in the marketplace. Or secondly, you can set a fixed price for the token of the NFT, the choice is totally yours. In addition to that, you can have royalties for the initial and subsequent sales.

Conclusion:

In conclusion, we can say that it is a new revenue source for artists to create their art and sell it to the marketplace. But the dark face of the NFTs and all the cryptocurrencies is that it takes a lot of electrical power to sustain. This ultimately results in the increased damage to nature, which is also very alarming. Let me know what do you think about the NFT by commenting below. Thanks for reading the post. See you in the next one.

Featured Image credit: Edited from Digital vector created by freepik – www.freepik.com