What Non Fungibe Tokens meaning
NFT stands for Non-fungible token. Before understanding what is an NFT, it is important to understand what the term “Fungible” means.
An asset or token is "Fungible" if it is interchangeable with another similar unit of same value.
A good example is the money we have in our wallets.
Although there are a lot of 50 EUR notes in circulation, it does not matter which one you get as they all have the same value.
The same goes for cryptocurrency. One Bitcoin is not any different from another.
Non fungible tokens (NFTs) are the opposite to “Fungible”. These set of assets are not interchangeable as they are unique in their own way.
Non-fungible assets include football tickets, arts, statues and digital art which are traded in real-life and on marketplaces on the web.
Tell me the difference between NFT and cryptocurrency?
NFT and cryptocurrencies use blockchain technologies. NFT markets can sometimes require people to buy NFTs through crypto. NFTs and cryptocurrencies have their own purpose.
Cryptocurrencies act as currencies, storing and selling money. Cryptocurrencies are fungible tokens like fiat currency. NFTs create unique digital asset tokens displaying ownership rights in digital goods.
Why are non Fungible tokens important?
NFT allows a digital representation of physical assets as well as providing an important step toward reinventing these systems. The concept of digital representation of physical assets is not new. But as a result of their combination with benefits of blockchain technology, smart contracts will have a potential impact on change in a number of areas.
Once offline and off-blockchain, such as real estate or a physical piece of art can be linked to NFTs, then NFTs can verify ownership of items beyond images and videos. This way real estate and physical art are not easily duplicated.
Because anyone can review the blockchain, the NFT ownership can be easily verified and traced, while the person or entity that owns the token can remain pseudonymous.
How many NFTs are there?
By October 2020 there were over 77,000 crypto currencies around the world. Many NFTs run on Ethereum and many other blockchains use other blockchains or are built on the proprietary network.
In consequence, countless individual FFTs are used for artwork, video, games, music etc. The number of artists that use these services is expected to grow over time.
Back in 2012 unique digital artwork was invented which was tied to crypto tokens. This led to the creation of a new set of non-fungible tokens.
A set of blockchain building blocks that allow developers to create their own NFTs.
NFTs are commonly created by uploading files, such as digital artwork, to an auction market.
A copy of the files is created which is then recorded as an NFT on the digital ledger. These NFTs can be bought with cryptocurrency and resold.
Although these type of NFTs have been around for years, it was only last year that got the public attention.
Cryptocurrency Enthusiasts and investors around the world got intrigued by this new generation of NFTs lately and the hype around them grew exponentially.
In fact, the sales recorded in February 2021 was 30 times more than the previous months.
Selling NFTs has been a lucrative business in the art world. Here are a few examples you may have heard about: Digital artist Beeple sold "Everydays — the First 5000 Days" for $ 69.3 million through a Christie's auction . A 20-second video clip of LeBron James "Cosmic Dunk #29" was sold for $208,000. A Crypto Punk NFT sold for $1.8 million at Sotheby's first curated NFT sale. Twitter CEO Jack Dorsey auctions an NFT of his first tweet
This might sound crazy, and it is.
The first thought that passed through my mind was
"Why I should buy a digital artwork when I can just copy, paste it or download it on the drive?"
The reason is that although anyone can copy it and have a similar artwork they will never own the original.
I can hire the best sculpture on earth to create a perfect replica of Davide (Michelangelo). He can do the same exact copy, but it will remain a replica and it will never be the original. This will also be reflected in the price.
The exact concept applies in NFTs.
Original - Millions $$
Replica - Few thousands $
Which are the most famous NFT Artwork to buy?
With a starting price of 9 Ether which is approximately $15k. Crypo Punks are the most expensive NFTs due to their limited supply of 10,000.
Beeples is a name give to a collection of non fungible tokens created by the digital artist Beeple, who sold his artwork for $69 million recently. All his artwork is gaining traction as investors are speculating that Beeples will be the Picasso of NFT.
The cost of Hashmasks is much lower, they start from the price of 1 ETH and depending on how rare their traits are, their price is determined.
There is a total supply of 16,384 and considering their limited supply the price of 1 ETH is a very reasonable price.
There is a much wide variety of NFTs available, which can be found on NFTs marketplaces.
Where to buy Non Fungible Tokens (NFTs)?
NFTs are purchased with cryptocurrency on marketplaces. You can browse these NFTs and buy your favorite in a few minutes from Open Sea marketplace, which is one of the largest NFT marketplaces
Personally, I am still skeptical about NFTs and their actual value, but I also know that today’s society values digital goods more than physical one.
Society is fully digitized, and I am pretty sure that the art world is moving into NFTs, with wider interest in the foreseeable future.
It is estimated that by the end of 2021 this market would have exceeded $1.2 billion.
Your still unsure?
Huge interest is also evident when looking at the number of visitors on OpenSea NFT marketplace. It jumped from 68.3 million visitors in November 2022 to 121.7 M in January 2022.
These forecasts makes the purchase of NFTs tempting as the purchase of NFTs at these early stages might turn out to be a massive opportunity in the near future.
If you are just curious or interested to explore more these artworks. Open an account with Open Sea, download MetaMask* plugin and you will be ready to go.
Are you joining the NFT MANIA?
*MetaMask is a wallet installed on your computer where you can store your cryptocurrency safely in a decentralized manner. It has to be topped up in Ethereum and used on decentralized platforms.