In this article we will explain NFTs in layman terms. Many of us are used to the term NFT and fact that in the ordinary world a collection of clothes can cost thousands, or even hundreds of thousands of dollars. Would you be surprised to learn that in the digital world, an ordinary picture from the Internet can be sold for millions of dollars?
For example, Twitter co-founder Jack Dorsey sold his first tweet for $ 2.9 million, while digital artist Beeple paid $ 69.3 million for crypto art. There are thousands of such examples, and any user can create his own Non Fungible Token and sell for fabulous money.
What is an NFT?
NFT in layman terms, it is a unique digital item that is located in the database (blockchain) and guarantees the originality and uniqueness of the item, which guarantees the right to own it.
These items cannot be replaced, swapped or duplicated. A token is any record in the blockchain, which is comparable to an order book, where the time and date, the amount and name of the token, from which and to which account the item was Non Fungible Token technology and how it worksent, is indicated. In an open blockchain, all tokens are equal and fungible. This is how the cryptocurrency works: for example, if you replace bitcoin (BTC) with another bitcoin, then nothing will change, but with NFT it will not work.
NFT technology and how it works
After all, Non Fungible Token (NFT) technology is designed for the opposite and works in a different way. A non-fungible token is an item that cannot be replaced with another without changing the object itself and its value.
Like cryptocurrency, Non Fungible Token is created on the blockchain, which is an analogue of a database for recording all transactions (it can be compared to a receipt received in a store for paying for goods). The blockchain guarantees the originality and uniqueness of the created or purchased NFTs. Thanks to this system, any user can verify the identity and history of any NFT.
The very first work to be digitalized was a stencil by artist Banksy called Morons (White). One company bought it, then burned it and created an Non Fungible token that links the virtual object to the burnt art from life.
Why are NFTs so unique?
When we buy NFTs, we buy not just pixels, but the uniqueness of ownership that no one else can own except you. Non Fungible token does not have to be a picture, it can be any digitized object (music track, photograph, etc.). Ownership is the lines of code that prove that you are the owner of the NFT and not someone else.
NFT is compared to a painting that hangs in a gallery, museum or in a private collection, but the audience can see it in a catalog or at an exhibition, or even buy it out at an affordable price.
Where to buy NFTs?
On various marketplaces on the Internet. To do this, you need to create your own crypto-wallet, connect a specific network on which the site operates, top up your balance and pay for the goods. After which it will be linked to your wallet.
Anyone can create such art. You can take a photo of the worst wall in your city, and then a few more similar objects, record a sound or make a meme, and then send it all to the marketplace, set a price and wait for a buyer. But it should be understood that most NFTs are sold only because famous people are behind them, or this is art about them.
For example: a famous rap artist releases a new video in which he mentions that he will sell NFT with his photos or videos from the filming, and even the most sincere fan will be able to buy a teaser for the new track. People immediately run to buy this digitized art in order to become unique owners of these items. And some are engaged in the reselling of these NFTs for the purpose of earning, and quite successfully. After all, everything that is heard will be sold for big money.
Examples of digital art
Not only works of art are sold in the form of NFTs. Even a popular joke from the Internet may have an owner. Gif Nyan Cat sold for over $ 500,000 at auction. Imagine more than half a million dollars for a regular GIF that you throw to your friends or acquaintances every day.
For the average person, NFT is a way to monetize their creativity and grow their audience. Moreover, in the context of the COVID-19 pandemic, selling online is much easier than selling paintings at a fair or singing songs in underground passages.