NFTs, non-fungible tokens, are anything digital that is uniquely different and cannot be replaced. Bitcoin is a fungible coin because you can substitute a bitcoin with another. But you cannot replace a specific artwork because it is unique. That’s the idea behind NFTs. For instance, Jack Dorsey, Twitter’s CEO, put up his autographed tweet for sale as an NFT. Similarly, Cristiano Ronaldo can put up his last match-winning ball for purchase as an NFT.
For more context, NFTs are digital assets that can be exchanged or sold online, with proof of authenticity and ownership through the blockchain. Blockchain is a digital ledger of transactions that is duplicated and distributed across a network of computer systems.
non-fungible tokens mainly operate in the Ethererum blockchain network. Other coins like Bitcoin and Dogecoin also have their respective non-fungible tokens. ETH coins specifically facilitate NFTs transactions. With NFTs, creators are exchanging or selling their crafts safely online without extra bureaucracies. There have been confusing opinions as to why creators can’t just sell their art offline. The logic behind NFTs is identical to the art exhibition where art lovers buy their favourite artist’s work. The value of artwork is hugely speculative. It primarily depends on what the buyer is ready to pay. The same is the case with NFTs.
For creators, non fungible tokens can increase accessibility for their works. Interested buyers can purchase crafts securely on the blockchain. Also, creators get a percentage of the piece each time an NFT is sold.
According to DappRadar, the NFT market exceeded $10 billion in transaction volume in the third quarter of 2021.
Next time you hear about NFTs, they are simply anything digital that can be sold or exchanged on the blockchain network.