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arunkc
arunkc

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What is an NFT?

This is the first question that popped in my head when I came across CryptoKitties. CryptoKitties is a game centered around collectibles. You can trade and sell these virtual kittens. I'm not gonna dig deep into how this game works. I haven't played it yet so no comments on that. Let's just say, it's how we used to collect poke cards or similar collectibles.

So why I bring this up now is because each cryptokitties are unique. How? Cryptokitties use NFT's i.e, Non-fungible token. "Non-fungible" means that it's unique, it can't be replaced by anything. To be precise we cannot actually determine the worth because of its uniqueness. So now you get why I brought up cryptokitties? Each tokens are one of a kind, if we want to trade it we will get something completely different.

cryptokitties gif

To make it clearer cryptocurrencies like Bitcoin or let's just say the currency we use daily are fungible. Means its interchangeable, a bitcoin in your hand is of the same worth as one that I have (not that I really have one!!)

How do NFTs work?

Most NFTs are part of the Ethereum blockchain. The majority of them follow ERC-721 and ERC-1155 standards. NFTs work differently from the usual cryptocurrencies, say a BTC or ETH coins. Why? you ask. Because it stores extra pieces of information that make them unique. Now you might have a doubt like does only Etherum blockchain have NFTs? No, absolutely not, any blockchain can have its own NFTs (Some already have)

So if it's like bitcoin can we buy/sell it?

Yes, you can. You can buy/sell NFTs at marketplaces like OpenSea, Rarible etc. There are many more, you can read about them here. NFTs can be anything digital, be it a simple gif, memes, drawings, you name it. Recently the famous Disaster Girl meme was sold for $500,000. Twitter co-founder Jack Dorsey even sold his first tweet as NFT for under $3 million. Yea people do buy them!!

Digital assets can be copied, so what's the point?

Yes again, you are right, digital assets can indeed be copied. But NFTs are designed to give you something that can't be copied, ie the ownership of the work. It's just like how some famous art pieces are owned by an individual or a museum, but still, its prints are available in the market for anyone to buy.

Can I build my own NFT tokens?

Yes, you can, just like how you can build your own cryptocurrency you can build an NFT too. If you are interested in that, you can read further here.

Final thoughts

The trend of NFT is far from over. It's just the tip of the iceberg. More than $2 billion was spent on NFTs during the first quarter of 2021. The demand for NFT is continuing to surge and it's not showing any sign of slowing down. As more and more blockchains are coming up with their own NFT services, we are witnessing the emergence of a new market. It's a hot topic that everyone's interested in.

💜 Thank you for reading 💜

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Discussion (4)

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s0bacc profile image
S0bacc

Quite a clear and easy to understand article. Many people today still don't know about it although this technology is being spread widely. Thanks for sharing it. I would also add that NFT can be implemented in many fields, its potential is really big. For instance, myimpactpower.org/ project offers NFT pictures not only to support it but also to show your affiliation. Such pictures won't be created in big batches so being an owner of one will be beneficial since its value will grow over time.

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arunkc profile image
arunkc Author

Thank you for your kind words 💜 and sharing about myimpactpower.org/
I will check it out 👍

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himann524 profile image
Himann524

I still can't get why it is considered as a revolution. I think it will die fast.
Although time will tell

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arunkc profile image
arunkc Author

Can't say for sure. As you said, time will tell us. Thank you for sharing your views ✌️