What is a Non-Fungible Token: All You Need to Know
Abstract: As the buzz around NFT (non fungible token) continues to ramp-up, don’t miss out this investment opportunity. Find out how NFTs work and where you can get them today.
Table of Contents
What Are NFTs and How Do They Work?
What Makes Up an NFT and How Can You Buy Them?
What Are the Issues With NFTs?
Conclusion
The non fungible token crypto craze is sweeping the world. We’re sure you’ve heard this buzzword before, but do you know what does nft stand for? What is a non fungible token? In this post, you’ll learn all about NFTs: how they work, where to buy them, and some of the gossip surrounding this revolutionary idea. Keep reading to learn more.
What Is NFT and How Does It Work?
Allow us to define NFT. Here’s the NFT definition: NFTs are digital assets that stand for tangible art. They exist on networks of decentralized computers that record transactions, known as blockchains. Blockchains are the technology that make cryptocurrencies and NFTs possible. The cool thing about NFTs is that they’re redefining what “art” means. NFTs can be much more than just a digital image: music, books, videos, gaming assets, anything that can be digitized can be an NFT.
But what does NFT mean exactly? NFT stands for “non-fungible token”, meaning that it can’t be exchanged with something else. It’s completely unique and not interchangeable. To help you understand the meaning of nft better, let’s compare them to other currencies. Both fiat and cryptocurrencies are fungible: a dollar can be traded for another dollar, as with Bitcoin, Ethereum, or any other crypto. Non-fungible means you can’t exchange these tokens with other ones, they are unique unto themselves.
The words “non fungible token” may seem daunting, but it’s quite a simple concept once you take it apart. Non fungible means unique, irreplaceable, one-of-a-kind. The opposite of non-fungible would be interchangeable, like a cryptocurrency token. NFTs are bought and sold using crypto, but they’re not the same thing. NFTs are made on the same kind of programs as cryptocurrencies, blockchain, but besides that they’re quite different.
Let’s use Bitcoin as an example. Every Bitcoin is worth the same amount as the other, they can be used and traded interchangeably because they are essentially the same thing. Not so with NFTs. Each NFT represents a unique, digitized work of art. Part of what makes them so useful is that they can represent almost anything, but we’ll get into that later.
What Makes Up an NFT and How Can You Buy Them?
NFTs are minted (made from) digital objects that stand for material and immaterial things. For example:
- Music
- Books
- Paintings
- Designer shoes
- gaming assets
- keepsakes
- Tweets
As you can see, there’s no limit to what you can make into an NFT. American fast food giant TacoBell recently made NFTs out of taco GIFs, and they sold out in under half an hour!
You can buy NFTs with any kind of currency: crypto, fiat, you can even exchange them for other NFTs. NFTs are generally bought and sold on marketplaces, such as Octogamex, where artists set the price for their work and customers can bid on it. Transaction data is recorded on blockchains. Most such platforms use Ethereum, since it’s such a versatile blockchain and token, making it ideal for non-fungible crypto tokens.
NFTs are also drastically changing the world of art. NFT tokens could be the solution to the exploitation of artists. The way it is now, art can be copied and sold illegally. The artist receives no compensation for other people reusing or re-selling their work. With NFT coins, the artist receives compensation every time their work is sold or traded. It’s a much fairer system, don’t you think?
What Are the Issues With NFTs?
As with any new kind of business, NFTs are taking fire from skeptics. The biggest criticism that NFTs face is that they are a new, unregulated sector. No one knows for sure if they will stay popular in the future, or if they’re just a fad that will quickly fade.
Another issue that critics like to point out is that it takes tremendous amounts of energy to produce and sell NFTs on blockchains. In what is known as mining, groups of supercomputers compete to solve complex problems and earn the right to own the NFT. Environmentalists are up in arms over mining, stating that the energy to produce them is creating more pollution, further damaging our planet’s atmosphere.
However, mining isn’t the only way to build a blockchain. Mining relies on proof of work (PoW), whereas many blockchains are now switching to proof of stake (PoS). Proof of stake is a much more energy-efficient, conservative way to build blockchains that support NFTs.
Conclusion
*Crossroad by Beeple
We hope you enjoyed learning about non fungible token meaning. NFTs are revolutionizing art, allowing artists to take direct ownership. Although a revolutionary concept, are they a good investment or just the latest thing? The evidence of their worth is overwhelming. Trending nft non fungible token can be sold for thousands and millions of dollars. Here’s a non fungible token example, one non-fungible token named Crossroad sold for over six million dollars! With profits like that, you can’t afford to not start collecting NFTs of your own. Start collecting non-fungible tokens today and invest in your future.
