Almost every day these days you get to hear of some NFT getting sold at a crazy high price. Most of the time, the news is about a meme getting sold. Remember the angry man from that cricket match; hands by the side? That meme circulated literally everywhere. The man in the meme turned it into an NFT too. But what even are these NFTs?
Non-Fungible Tokens (NFTs)
To understand non-fungible, you will have to begin with knowing fungible. Fungible is something that has an equivalent value of exchange. In the real world, for instance, you can exchange a 10-rupees note with another 10-rupee note. This is fungible trade. Even in the virtual world, if you make transactions with bitcoins that is, that too is fungible.
However, buying digital items from that cryptocurrency makes that trade non-fungible. The digital items, hence, become Non-Fungible Tokens (NFTs). Some of these NFTs have been sold for millions of dollars.
What can these NFTs be though? It is not just memes, images, or pixel art. Given the initiation of the metaverse and numerous brands establishing their presence in virtual reality, their products in the new universe automatically become NFTs as well. Take Nike, for instance. They have bought an NFT company and will now introduce digital sneakers in the metaverse. This way the digital sneakers become NFTs.
You can even make your own NFTs too if you have the right technical information.
What happens when you become an NFT owner? The blockchain technology will then keep a record of the ownership history of that product.
Basically, when one person sells for example an art piece as NFT, the buyer will not get that painting. Once the buyer sends the required cryptocurrency to the seller, they get a certificate. It is a digital certificate that the buyer can store in the digital wallet.
This debunks the assumption that NFTs are digital items only. Instead of saying that we can now correctly say NFTs are digital contracts. These contracts will contain content such as rules about the available number of sellable copies.
Is it a sure thing?
Seeing the successful sale of a few items going in millions of dollars, people wrongfully assume it to be a profitable business. However, just like any other field, it is not set in stone that people will make profits instantaneously or in fact ever. Some enthusiasts whom you expect to have the know-how got very small returns, and some had to walk away empty-handed.
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