All about NFTs #1 Introduction
Introduction to NFTs
NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain — no one can modify the record of ownership or copy/paste a new NFT into existence.
NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties.
Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.
Hurray! Now you have all the basic knowledge about NFTs. Go-ahead, brag about it to your friends! But, wait! There’s still more to learn. Let’s talk about the internet of assets now!
The internet of assets
NFTs and Ethereum solve some of the problems that exist on the internet today. As everything becomes more digital, there’s a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership. Not to mention that digital items often only work in the context of their product. For example you can’t re-sell an iTunes mp3 you’ve purchased, or you can’t exchange one company’s loyalty points for another platform’s credit even if there’s a market for it.
Here’s how an internet of NFTs compared to the internet most of us use today looks…
An NFT internet ↔ The Internet today
NFTs are digitally unique, no two NFTs are the same ↔ A copy of a file, like an .mp3 or .jpg, is the same as the original
Every NFT must have an owner and this is of public record and easy for anyone to verify ↔ Ownership records of digital items are stored on servers controlled by institutions — you must take their word for it.
NFTs are compatible with anything built using Ethereum. An NFT ticket for an event can be traded on every Ethereum marketplace, for an entirely different exchange. ↔ Companies with digital items must build their own infrastructure. For example an app that issues digital tickets for events would have to build their own ticket exchange.
Creators can retain ownership rights over their own work, and claim resale royalties directly. ↔ Platforms, such as music streaming services, retain the majority of profits from sales.
Makes sense, right! No wonder why everyone wants to ride the NFT tide! Check out some of these examples:
The NFT world is relatively new. In theory, the scope for NFTs is anything that is unique that needs provable ownership. Here are some examples of NFTs that exist today, to help you get the idea:
- A unique digital artwork
- A unique sneaker in a limited-run fashion line
- An in-game item
- An essay
- A digital collectible
- A domain name
- A ticket that gives you access to an event or a coupon
Oh, no! Are you one of those people who think your time, effort and money might go to waste with NFTs? Well, Nah! Otherwise, you wouldn’t be here. But we assure you that it’s absolutely safe, and worth your time and effort. The mechanism stated below will put your mind at ease too!