Non-Fungible Token (NFT) are all over the internet right now, with people apparently making millions of dollars just from buying and trading photos over the blockchain.
NFTs, or non-fungible tokens, are unique tokens that can be bought and sold online, with a digital proof of ownership via the blockchain.
NFT comes from two words, non-fungible and token. Non-fungible essentially means something that is very unique and cannot be substituted. For example, the Mona Lisa painting, Leonardo Da Vinci’s most famous painting is non-fungible, it is unique and only one such painting exists in the world. Token refers to the digital existence of an asset on the blockchain, most commonly digital art as of now.
WHAT IS BLOCKCHAIN?
The blockchain acts similar to a decentralized ledger, wherein data is kept in the form of blocks, which are distinct, but connected as a chain leading to the name blockchain. The unique feature of blockchain technology is that all data stored on the blockchain is decentralized in nature.
Ethereum was the first blockchain to introduce the concept of creation and storage of NFTs over the internet. Other networks that now support NFTs include Solana, Flow and Tezos. Blockchain stores NFTs differently as opposed to coins as there needs to be storage of some extra information that makes them work differently.
NFTs are bought and traded over online marketplaces, which act as peer-to-peer trading platforms. OpenSea is probably one such site for buying & selling NFTs, which is on Ethereum or the Polygon blockchain. The company has benefited massively from the NFT boom and has proven to be the number one site for users to list, browse, and bid on tokens without having to interact directly with the blockchain.
American multinational corporation Nike has also made a step towards a real-life NFT, by patenting a method to verify sneakers’ authenticity using an NFT system known as CryptoKicks.
Graphic designer Beeple managed to sell a piece of digital art earlier last year for a whopping $69m at Christie’s auction house, which was recorded as the first NFT-based work of art sold by a “major” auction house, and that too for a world record price for digital work.
As more and more people are leaning toward the concept of investing in cryptocurrencies and trading NFTs, celebrities and movie stars around the world have started bringing out their own NFTs, leading to a bigger boom in the craze around non-fungible tokens (NFTs). Rapper Snoop Dogg, singer Shawn Mendes, and many celebrities have tokenized stuff from their music, videos, artwork, with some even converting their old tweets into NFTs.
NFTs are no longer just a source of bragging, or a piece of digital art, the crypto space has converted these into investments for several crypto investors. Famous NFTs collections like the Bored Apes now sell for more than the price of a Ferrari, and as the craze around these continues, the price will only increase.