2022.12.12
A Brief Introduction to NFT (I)
- What does NFT stand for and what is it?
- NFT stands for a Non-fungible Token. At a basic level, an NFT is a digital asset that links ownership to unique physical or digital items, such as works of art, real estate, music, or videos.
- NFTs can be considered modern-day collectibles. They’re bought and sold online and represent a digital proof of ownership. As NFTs are recorded on a blockchain, the same technology behind cryptocurrencies like Bitcoin, it is extremely difficult to alter or counterfeit them.
- Most NFTs are part of the Ethereum blockchain, though other blockchains have implemented their own version of NFTs. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also keeps track of who’s holding and trading NFTs.
- NFT stands for a Non-fungible Token. At a basic level, an NFT is a digital asset that links ownership to unique physical or digital items, such as works of art, real estate, music, or videos.
- What’s the difference between NFTs and cryptocurrency?
- NFTs and cryptocurrencies rely on the same underlying blockchain technology. NFT marketplaces may also require people to purchase NFTs with a cryptocurrency. However, cryptocurrencies and NFTs are created and used for different purposes.
- Cryptocurrencies aim to act as currencies by either storing value or letting you buy or sell goods. Cryptocurrency tokens are fungible tokens, similar to fiat currencies, like a dollar. NFTs create one-of-a-kind tokens that can show ownership and convey rights over digital goods.
- NFTs and cryptocurrencies rely on the same underlying blockchain technology. NFT marketplaces may also require people to purchase NFTs with a cryptocurrency. However, cryptocurrencies and NFTs are created and used for different purposes.
- I’ve heard about blockchain many times on media, and it seems the technology makes sure my NFTs are not counterfeit or altered. But what is a blockchain, exactly?
- A blockchain is a database that is shared across a network of computers. All information is constantly reconciled into the database, which is stored in multiple locations and updated instantly. That means the records are public and verifiable. Since there’s no central location, it’s harder to hack as the info exists simultaneously in millions of places.
- This analogy found online may help you understand how it works: “Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet.”
- A blockchain is a database that is shared across a network of computers. All information is constantly reconciled into the database, which is stored in multiple locations and updated instantly. That means the records are public and verifiable. Since there’s no central location, it’s harder to hack as the info exists simultaneously in millions of places.
- So, blockchain is something like a digital version of a ledger, keeping NFTs safe and secure. Then how does someone make an NFT? Can anyone make it?
- Virtually anyone can create an NFT and sell it. All that’s needed is a digital wallet, a small purchase of Ethereum, and a connection to an NFT marketplace where you can upload and turn the content into an NFT.
- It seems and is simple to make an NFT. However, you must understand that you may end up spending a lot of money on the business before selling a single NFT. As I previously mentioned, most NFTs are sold on the Ethereum blockchain, and every transaction on the Ethereum blockchain costs fees are called “gas.” In fact, almost everything you do on the blockchain, from converting a digital file into a blockchain-based NFT (which is called “minting”) to transferring it to someone else to bidding to purchase one, will cost gas.
- Nevertheless, paying “gas” does not guarantee your transfer will go through. You can pay more to give yourself a higher chance, but it is never a sure thing. To be clear, most transactions are likely to go through. However, if something does happen and your transaction isn’t completed, you will not get the “gas” fees back.
- Virtually anyone can create an NFT and sell it. All that’s needed is a digital wallet, a small purchase of Ethereum, and a connection to an NFT marketplace where you can upload and turn the content into an NFT.
