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Decoding NFTs: Everything About NFT

In the near future, NFTs might replace digital currency, just the way digital currency replaced the use of cash! 

NFTs or Non-Fungible Tokens are creating a buzz on the internet lately. What’s the reason behind the spotlight they are getting? We are going to deep dive into the trend and let’s see what the future of these tokens looks like.

What are NFTs?

NFT stands for Non-fungible Token. Fungible means replaceable and non-fungible means something that you can not replace. A $5 burger can be replaced by another $5 burger. However, if you made a painting of a Burger, it’s unique, it’s one of its kind and it can not be replaced. When we show the ownership of that particular painting through blockchain technology, it is called NFT.

Each NFT is unique and can not be changed with one another. Unlike currency, NFTs can not be divided. For example, $100 can be converted into 5x $20, on the other hand, an NFT of a song will be specifically one, it can not be divided, replaced or copied. 

The use of NFT

We all have documents of our car and home, which proves the authenticity and ownership. However, if we put a picture or song or any artwork for that matter for sale online, it can easily get copied. That’s where the use of NFTs comes in. NFT adds a digital signature which proves the ownership and it can not be replaceable.

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How does NFT work? 

NFT uses blockchain technology. It created a digital certificate of any form of art including music, photo or even a GIF. NFT majorly relies on Ethyrium blockchain. Let’s understand the NFT transaction with an example. If I transfer Rs. 100 to my friend’s bank account, our banks will record and approve the transaction but no one else knows about it. So, it is centralised. Blockchain is a decentralised concept, where all the transactions are public. Hence, if I sell one NFT, it will be recorded in thousands of computers worldwide. 

So, NFT is a legitimate way to prove your ownership which is recorded in the decentralised blockchain forever. It can not be edited or deleted. 

How is it different from Bitcoin?

Bitcoin and Dogecoin are fungible tokens. So, you can trade them with each other and you can get the same value. On the other hand, NFTs are non-fungible, meaning if you trade NFT, you will end up with something different. 

The future of NFT

NFT of a picture or a GIF is a very initial thing. Going forward, there are many advances in this new tech. iNFT is a new thing, where “i” stands for intelligent. Imagine, you buy an NFT avatar and then with the help of artificial intelligence you teach new skills to the avatar, make them speak to you and do your work! Very interesting, right! We are heading towards that. Another major use case of NFTs is in the Metaverse. Brands like Nike sell their shoes in the Metaverse and you can buy them with the help of NFT. 

So, the future of NFT is definitely very exciting. However, we are still in a very early stage.

 

Vedant Dave

Co-Founder at People News Chronicle

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