Meaning Of NFT
NFT meaning is Non Fungible Token, is data added to a file that creates a unique signature. So that it can neither be replaced nor interchanged because it has unique properties. NFT can be an image file, a video, an audio, a gif file, a song, a tweet, a text posted on a website and various other digital formats.
In other words, Non-Fungible Tokens (NFTs) are non-interchangeable digital assets like art, music, and games with an authentic certificate created by blockchain technology, traded over the internet. It is generated and traded in cryptocurrency which is digital cash.
It is popular today because they offer a unique marketplace for digital assets with even people creating their own NFTs and selling on the internet. NFTs allow users a flexible way to store, control, and protect the information related to their identity.
NFT vs Physical Objects
| NFTs | Physical Objects |
| NFTs are collectible digital items | Collectible physical items |
| NFTs are non-tangible | It is tangible. |
| It may be an image, video or a tweet. | It may be collectible cards, a Statue or anythings |
| You can buy, sell, trade, or give NFTs to anyone to online. | You can buy, sell, trade, or give physical object to anyone to offline as well as online. |
| Proof of authenticity: digital signature added to the digital work. | Proof of authenticity: holographic stickers or special paper. |
Working of NFT
NFTs exist on a blockchain technology, which is a distributed public ledger that records transactions. Most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency like bitcoin, Litecoin or dogecoin. An NFT can only have one owner at a time. Ownership is managed through the uniqueID and metadata that no other token can replicate.
Many NFTs come with their own unique information, including ownership and transaction details stored under its smart contract. NFT creators can also add details to their NFTs such as the creator’s identity, secure links to files, and more during transactions.
People interested in collecting or investing in non-fungible tokens need a digital NFT wallet. A digital wallet is a cryptocurrency wallet that supports the ethereum blockchain protocol on which NFTs are built.
Why NFT Is Important ?
NFTs are an evolution of the relatively simple concept of crypto currencies. NFTs are a step forward in the reinvention of the current finance infrastructure. With the help of NFTs we can convert any physical asset into a digital one streamlines processes and removes intermediaries. NFTs representing digital or physical artwork on a blockchain remove the need for agents and allow artists to connect directly with their audiences, so that they can maximum profits.
Where Can I Buy NFT ?
You can sell, buy, trade, and create NFTs from online exchanges known as NFTs marketplaces. Currently, the largest NFT marketplaces listed below:
- OpenSea: OpenSea strives to be the most trustworthy and secure marketplace for NFTs. It was founded in 2017, today OpenSea is first and largest marketplace for NFTs. It has the 600K+ users base with 80 million+ listed NFTs. Till now they have traded 20 Billion+ USD.
- SuperRare: SuperRare is a marketplace to collect and trade unique, single-edition digital artworks. Here you can list your digital artwork for auction also.
- Foundation: Foundation is a platform that aims to build a new creative economy—a world where creators can use the Ethereum blockchain to value their work in entirely new ways, and build stronger connections with their supporters. Foundation provides a network of mutual support between creators and collectors.
- Nifty Gateway: Nifty Gateway offers a diverse range of art and collectible NFTs which are available as Curated Drops. Nifty Gateway teams up with top artists and brands to create collections of limited edition and high quality NFTs.
- Rarible: Rarible is a multichain marketplace, meaning you can buy, mint and sell NFTs on multiple blockchains. It supports multiple crypto currencies Ethereum, Flow and Tezos.
Top 5 Most Expensive NFT Artworks
1. Everydays: The First 5000 Days | 69.3 million USD | (38,525 ETH)
Acclaimed digital artist Beeple, created a record when his single piece artwork titled “Everydays – The First 5000 Days” sold for US$69.3 million (38,525 ETH) at a Christie’s auction on 11 March 2021. It is a collage of 5,000 individual images made one per day over more than thirteen years from 2007 to 2020.
2. Clock| 52.7 million USD | (16,953 ETH)
In Feb 2022, Julian Assange and Pak’s Clock NFT became the second-most expensive single NFT ever sold after the Beeple’s Everydays: The First 5000 Days. It’s a single NFT that depicts a timer, which counts the number of days Assange has spent in prison. It was curated as part of Pak & Assange’s Censored collection.
3. Human One| 28.9 million USD | (4,700 ETH)
Beeple had his second-most successful NFT artwork sale on 9 Nov 2021 known as “Human One”. It went under the hammer for US$28.9 million. Beeple created a futuristic human-like sculpture, which was seven feet tall and appears to be perpetually walking across ever-changing landscapes.
4. Cryptopunk #5822| 23.7 million USD | (8,000 ETH)
CryptoPunks is essentially a collection of 10,000 tokens called ‘punks’ by their creators and collectors. CryptoPunk #5822 was sold for 8000 ETH, which converts to roughly 23.7 million USD on 13 Feb 2022. CryptoPunk is part of the Alien series collection and featuring a bluish-green skin with only one attribute a blue bandana.
5. Ringers| 6.9 million USD | (2,100 ETH)
Ringers is an artwork done by Art Blocks, is a static image of a series of loops around multiple pegs. Ringers was sold for US$6.9 million in October 2021. Ringers has continued to exist as a generative art favorite within the NFT community.
Advantages of NFT
New Revenue Stream for Artists: It helps artists earn more money in a digital landscape that hasn’t been particularly kind to them before.
Data/content Ownership: With the help of Non-Fungible Tokens (NFTs) users will gain complete ownership and control of their information.
Smart Contracts: These digital contracts are executed automatically once rules/conditions are met. Smart contract facilitate, verify, or negotiate a contract agreement of a transactions.
Fractionalize Ownership of Physical Assets: Today fractionalize ownership of certain assets is difficult but it is much easier to divide a digitized version of a building among multiple owners than a physical one
Disadvantages of NFT
NFT generation is highly energy-intensive: NFTs are currently run by the Ethereum blockchain, which consumes a lot amount of energy.
NFTs Are Illiquid: the market for NFTs is not very liquid. Means NFTs can be very difficult to trade, especially during periods of distress. It also means NFT prices can be highly volatile.
FAQs
1 What is Blockchain Technology?
A blockchain technology is a distributed database that is shared among the nodes of a computer network or in other words, a blockchain is essentially a digital ledger of transactions and tracking assets that is duplicated and distributed across the entire network of computer systems. Read More
2 What is Distributed Ledger Technology (DLT)?
In blockchain technology all network participants have access to the distributed ledger. Distributed Ledger Technology (DLT) is a protocol that enables the secure functioning of a decentralized digital database. Read More
3 What is Web 3.0?
Web 3.0 is an improvement over the current internet Web 2.0. Technologies like machine learning (ML), artificial intelligence (AI), Big Data, semantic web, decentralized ledger technology (DLT) etc. are used to build the web 3.0 internet. Read More
4 What is Semantic Web?
The Semantic Web is the heart of web3.0. It is an extension of the existing World Wide Web. The goal of the Semantic Web is to make Internet data machine-readable. The semantic web involves publishing the data in a language, Resource Description Framework (RDF) specifically for data. Read More