Knowledge Base

What is an NFT?

You may have heard the news about NFTs. Everywhere there is talk about them.

Facebook and Instagram may allow users to create, showcase and sell NFT’s

How Twitter could take NFT’s mainstream

Meta dives into NFT digital collectibles craze

‘Nyan Cat’ flying pop-tart meme sells for nearly $600,000 as one-of-a-kind crypto art

The internet is full of news about sales, purchases, or companies entering the new era of NFT’s and everybody has an opinion about them. But do you know what NFT is? Let us clear all the confusion about this new asset class – NFT

What is an NFT?

NFT or non-fungible assets are digital tokens that are not interchangeable because of their unique properties and have only one official owner at a time.

Anything which has some economic value such as digital artwork or collectibles is converted into non-fungible, verifiable assets that can be traded, swapped, or exchanged through crypto exchanges.

NFTs are not necessarily artworks, in Metaverse virtual land can also be bought as NFT too.

The world is going crazy about acquiring NFTs and the companies are joining too as everything from art to video games becomes tokenized. This all is possible through Blockchain technology. Let us discuss how NFTs work?

NFT over Internet Copy?

So the question is when you can create a copy of an image or save a video in a few short steps and look at it whenever you want, what is the point of buying/selling NFTs. Let us dive deeper into the world of NFTs and conventional jpeg files,mp4 videos, etc.

  • Ownership – While copyright rules are there, still with the development of the Internet anyone can copy your work, and proving ownership becomes tedious, difficult too. In the case of NFTs, every transaction is recorded publicly and verifiable through a chain of records.
  • Uniqueness – Every NFT is digitally unique while you can create a copy of a file through the internet and that copy would be the same as the original.
  • Easily Traded – NFTs are also unique in the sense that they can be traded with different NFTs through the crypto exchanges however for other digital items they can be sold sometimes (event tickets for example) however they have a limited user base and non-tradable
  • No Geographical Boundaries – Content creators can now sell their work through these global crypto exchanges and have not to be restricted with country-wise rules, regulations, etc.
  • Resale Royalties – One point that is in favor of content creators is that they get a percent of resale royalties every time their NFT is sold to a different owner.

    How do NFTs work?

    Just like cryptocurrencies, NFTs can be bought or sold on crypto exchanges or NFT marketplaces. When an NFT is bought, owners get the certificate of ownership of the NFT which is registered on the Blockchain. The certificate is stored in the owners’ digital wallets. This certificate contains information such as the number of copies available for sale, royalty fee, etc.

    Some of the most popular NFT marketplaces are – OpenSea, Raible, Grimes Choice, Nifty Gateway, etc.

    Crypto art- is this the future?

    Although digital copies are present on the internet, still owning an NFT is all the rage right now. One tweet being sold for $2.9 million is only one such example. Critics oppose buying NFT with the logic that an internet copy can easily be obtained however the same can be said about pictures of Van Gogh or Da Vinci masterpieces. Is that the same or not?

    With the headaches such as proof of ownership or threat of theft being removed from the equation, NFTs are definitely here to stay and rule the world of artists and art collectors.