Non Fungible Tokens
NFTs! Here is a hype in the air about all these NFTs and stuff! Celebrities, Artists, even models like Bella Hadid are talking about NFTs and releasing their NFTs. If you are wondering what this buzzword is everyone is talking about, then you are in the right place to learn all about NFTs!
What Are Fungible Tokens?
First we will take a look at fungible tokens, so that we can better understand non-fungible tokens. Assets or tokens that can be divided into multiples are fungible. For instance, fungible fiat currencies include the US dollar: A $1 bill is worth the same in California and in New York City. A cryptocurrency like Bitcoin is also a fungible token, no matter where it is issued, one bitcoin is worth one bitcoin.
What Is a Non-Fungible Token (NFTs)?
NFTs stands for Non- fungible tokens and they represent unique digital assets like art, music, concert tickets and much more. Any type of digital asset that is unique and requires ownership, such as digital art, audio, in-game items, real estate, and domain names, might be considered an NFT. In short, NFTs are tokens that represent ownership of any digital asset on the blockchain. Because every digital file can be duplicated, shared and downloaded, it can be difficult to determine who owns what. For instance, we all download Mp3 files of our favourite songs from the internet, despite the fact that the creator of the music or song is the original owner. NFTs therefore assist in identifying the original owner of a digital asset.
Difference between Fungible and Non Fungible Token!
How NFT Works?
Consider creating a piece of digital art, now to convert the piece of art into an NFT you should mint it. NFTs are minted through smart contracts that assign ownership and reassign it when transferred or resold. Mint is a process of writing the ownership detail on the blockchain so that it becomes immutable and will represent a solid and authentic ownership. All of the information about your art is now in the form of a unique NFT. An NFT has the following details within it.
- Unique token Id (hash)
- Token Name
- Token Symbol
The NFT is then kept on the blockchain which represents ownership. Keep in mind that the blockchain does not include any digital art! The only thing on the blockchain is the NFT, which contains information such as the hash, token name, symbol, and link to a file housed on IPFS.
How NFT Helps In Finding Ownership?
Even if the original NFT creator sells the digital asset (NFT), the original artwork will belong to the token owner (one who brought the NFT), but the creator (Original Owner) will still control the copyright and reproduction rights (which means he can still sell prints of his artwork). So how does the technological side of ownership work? NFTs that exist on the blockchain store the specific characteristics, as well as the present and past owners of the digital content. Even royalty payments to the original creator can be programmed into an NFT when it is transferred.
Hope you understood the ABCs of NFTs. Hey do you know you can earn money through NFTs? Learn how by clicking the link!
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