According to many, NFT and the technology that underpins it, Blockchain, are potential game changers with limitless applications. However, it can be difficult for some to grasp.
NFTs are Non-Fungible Tokens. In layman’s terms, non-fungible can also mean non-replaceable. i.e. something unique and irreplaceable Let’s simplify and expand it even more.
First, let us try to understand what is blockchain. Satoshi Nakomoto proposed the blockchain concept in 2009. He said that can we transform the centralized world into a decentralized world. So, a blockchain was a decentralised and distributed digital ledger of transactions.
To understand centralized and decentralized way, let’s take a look at this. Centralized way is something which exists everywhere like the centralized way of financing. That is, you make a transaction and there is a central authority like a bank which overlooks all those transactions and holds those records and controls its value and its decisions impact the value of that currency. And decentralized is something where you distribute the activities across a certain group or community or a vast distributed group.
So, blockchain is a digital ledger of transactions that is duplicated and distributed across the blockchain’s network of computer systems. Each block in the chain contains a number of transactions, and each time a new transaction takes place on the blockchain, it is recorded in the ledger of each participant.
Let’s have a look at what NFTs are. NFTs are used to symbolize the ownership or possession of artwork, identities, property, or anything else that is unique. It’s essentially proving that you possess something unique. Now we know that NFTs are constructed on the underlying technology of blockchains, hence they can’t be replicated, and their unique identification and ownership can be validated using the blockchain ledger. Also, because it’s digital, there’s a piece of code linked to it that’s programmed to pay royalties to the original creator for every subsequent/further sale of it’s NFT.
NFTs can be used in a variety of situations. It all comes down to using technology in a creative way. Rapper Post Malone, for example, recently offered a virtual beer pong game with the unusual twist of selling the tickets as NFTs. As a result, it can be used as ‘keys’ or to sell or buy one-of-a-kind, irreplaceable experiences. There have also been discussions about how the NFT, which is based on blockchain, could be used in a variety of real-world scenarios. It can, for example, be used to eliminate the need for costly intermediaries when negotiating or signing contracts. Smart digital contracts can also be created using this technology.
NFTs are a relatively new technology. It’s a one-of-a-kind technology, and the blockchain world is a whole new world. So, before you go in, make sure you’re familiar with the logic and technology.
One thing is clear: whether NFTs are a fleeting trend or here to stay is a different discussion entirely, but blockchain technology will undoubtedly revolutionise the world. This is solely due to the fact that there is now a new system/mechanism that allows us to record authenticity and ownership without any disagreement. Consider how this technology could be used to settle any disagreements about who owns a house or a property contract, or who owns any contract, or to determine the legitimacy of any degree. All of these conflicts will be resolved because technology now allows us to define ownership in absolute terms that cannot be challenged or altered.
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