What is NFT?
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| What is NFT - Simply Explained NFT |
The recent development of cryptocurrency and digital technologies has made this world more advanced, and it has become hard to keep up.
This digital revolution led to the emergence of new cryptocurrencies and new concepts in Blockchain in general, one of the most intriguing concepts recently is NFT.
Maybe when you hear that many people earn millions by selling images or text, here you wonder, what is this!? That's why we will explain in this article what is NFT technology, how it appeared, how to buy or sell things using NFT, and how to make money with NFTs.
Concepts you must know before trying to understand NFT
NFT did not appear randomly, but rather it is the result of a group of technologies that have developed and advanced, until that progress resulted in a group of new technologies, most notably the NFT. To fully explain, this is a set of the most prominent of these terms and concepts that you must know before diving into the NFT concept:
Blockchain
We will simplify all information in this article.
Blockchain is a decentralized network made up of a collection of devices connected to it. This network differs from ordinary networks because the information that revolves in this network cannot be tracked, traced, or even hacked because when it is transmitted in the network it is copied to all devices on that network. Even if it is deleted from one computer, you will find the same information on a million other computers, and you cannot know its source because all the computers in that network share the same information.
Bitcoin
Bitcoin is the first cryptocurrency that appeared in the world. Bitcoin relies on the Blockchain as the primary form for storing the Table of Transactions. Bitcoin is a divisible currency, which means instead of collecting Bitcoin, it is possible to collect a satoshi (a small unit of Bitcoin).
Bitcoin, in general, is not tangible, but you can buy its value in the Blockchain network.
Ethereum
We will tell you later why you should also understand the concept of Ethereum. In general, Ethereum is Altcoins, it is an alternative cryptocurrency to Bitcoin, and it is considered one of the most popular Altcoins. These days, it has become the main competitor to Bitcoin, and its popularity has reached its use in large corporate projects, such as its use in the NFT. Ethereum is not different in concept over Bitcoin, except that each crypto has its Blockchain network.
What is NFT?
By convention, NFT is an acronym for Non-Fungible Tokens. In its simplest terms, it is the acquisition of a token of any type in the Blockchain network, with its pricing determined. This token is then not replaceable or refundable, and the only way to sell or buy it is through decentralized contracts that secure the ownership of this token from the seller to the buyer.
Trying to explain it better, imagine that you live in a city called Blockchain contains many pieces of land, one spot next to the other. You reserve a part of this land and place a specific business in it. So, no one ever can destroy what's on that patch of land or resell it because you are the owner of this land. And because you are the owner, you can charge each person who uses that business in your Blockchain city, and in case you want to sell it, you transfer all the contracts of the land piece to someone else.
The most popular NFT currently operates on the Ethereum network (that's why we mentioned Ethereum earlier). By encoding ERC 1155 and ERC721, that shows the ownership of the NFT token for any digital material. Unlike cryptocurrencies such as Ethereum, NFT has a unique value; for example, if we say that "Joel" has a certain NFT and "Jane" has another NFT, this does not mean that they have the same value, perhaps that is worth $100, and the other is worth 200$. Unlike Ethereum, if "Joel" has 1 Ethereum and "Jane" has 1 Ethereum, then they have the same amount based on Ethereum price.
What can I sell as NFT?
NFT revolution started years ago, but not many people have made any purchases and exchanges until recently. Among the things that you can sell or transfer its ownership through contracts is all digital content, including images, music, songs, games, logos, applications, software, and more.
As an example of things that have been sold recently through the NFT, we find:
- The founder of Twitter sold his first tweet on the Twitter platform for a price of 2 million dollars; as you can see, the tweet technically was not sold because it is in his profile. What was done was the $2 million worth of blockchain being reserved for an unknown person X. So, in the blockchain now, this tweet belongs to Person X.
- The Disaster Girl meme sold for $500,000, so it is now private property for its owner in the Blockchain network.
- Blockparty company begins booking songs in the form of non-fungible tokens. Singers and musicians will now have the ability to assign and reserve their music in the form of NFT in the network for a confirmed price.
After its recent revolution, everyone will now want to allocate non-fungible tokens to their digital holdings, they can either get paid to use them in part or buy their entire usage contract for a total price.
The most prominent features of NFT
The NFT comes loaded with many features and characteristics, which make the whole world pay attention to it, including:
- It is not divisible or divided and is not equal to each other: We have already touched on these two points. An NFT token is not equal to the value of another NFT token, nor can it be divided, so it is an integrated unit.
- Irremovable: Once a token value sets to NFT, it is not only non-fungible, but it is also irremovable, meaning that it remains permanently reserved and at its original value.
- Quickly Verifiable: Have you ever tried uploading a video to YouTube and then hours later telling you that the video contains copyright to another video? The NFT can do the same very quickly.
- The future of the supply and demand market: the use of Blockchain networks is considered secure and confidential, and no third party can control it; Like other networks for buying and selling, its engine is supply and demand, and the NFT has begun to receive a good market of offers and requests now, which is the future of this market.
How can I buy or sell digital material in NFT?
Illustrators and creators, in general, are now selling all their holdings in NFT. Among the best marketplaces currently for buying or selling NFT, OpenSea and Rarilbe. Once you access the platform, you will find many digital materials which can be purchased using Ethereum cryptocurrency. You can also sell your digital holdings via those platforms for an amount of Ethereum.
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