What are NFTs?
Several people don’t know what NFTs are but its they have most likely heard about it online via social media platforms or via several websites. And it’s common for many folks to have never heard of NFTs. In this article, I’ll be explaining the meaning and several details of NFTs.
What Is A NFT and How Does It Work?
NFT, which stands for “Non-Fungible Token,” only enables customers to acquire ownership of a digital asset existing on a blockchain. Anything in the form of a special digital currency existing on a blockchain might be it, including pictures, videos, animations, artwork and more. An NFT can be anything. It can be tokenized if it is digitized. In this day and age, what is not digital? Nothing! Then, what is tokenization? The concept is quite complex, but it basically means to turn an asset into a digital token that can be moved and stored on a blockchain, such as Ethereum or Solana, for example.
Let’s consider it from this perspective; Digital assets that you already possess, such as photos or videos, can be “tokenized” or converted into NFTs. Then, cryptocurrency can be used to buy, sell, or exchange these tokenized goods. Your furniture, a song file, or your computer might all be considered non-fungible in terms of economics. Due to their distinctive characteristics, some goods cannot be substituted with other items.
Contrarily, fungible goods are exchangeable because their worth, not their special qualities, determines them. For instance, currencies like the naira are fungible: A N1000 note in Lagos Sate has the same value as a N1000 note in Abuja. A fungible token can also be a cryptocurrency like Bitcoin: 1 BTC is worth 1 BTC, no matter where it is issued.
You need a cryptocurrency in order to buy an NFT. Your virtual currencies are kept at this place. You can spend, receive, and exchange coins with your cryptocurrency wallet. NFTs may be found in a number of sectors, including Collectibles, Gaming, Sports, fashion industry, real estate amidst others. If you’re a painter, you could use NFTs to sell your works; buyers would also use NFTs to make purchases. An NFT functions as a kind of digital stamp for your digital assets.
The blockchain now establishes that you genuinely own the original NFT, even if you weren’t the original producer of the image or painting. An NFT is stored in your wallet after it is created. You may access your NFT using this wallet, which is then listed as the owner of the NFT in the NFT contract. On Ethereum, this contract is active.