What is NFT – NFT future of cryptocurrency
NFT future of cryptocurrency: NFT stands for Non-Fungible Tokens, it is a cryptographic asset on the blockchain with unique identification code and metadata that makes them unique from one another. This means that each NFT is different from one another so, they can be used as a medium of exchange like Bitcoin, Ethereum and other coins. NFT differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can be used as a medium for commercial transactions.
The current market for NFT is centred around collectables such as rarities, anime cards, and artworks. Perhaps the most hyped space is NBA Top Shot, a place to collect non-fungible tokenized NBA moments in a digital card form. Some of these cards have sold for millions of dollars. Recently, Twitter CEO, Jack Dorsey, tweeted a link to a tokenized version of the first tweet ever written where he wrote “just setting up my twttr.” The NFT version of the first-ever tweet has sold for $2.9 million.
How NFT works
Most NFTs works on the Ethereum blockchain. Ethereum is a cryptocurrency like Bitcoin, but its blockchain also supports NFTs, which stores extra information to make it differ from fungible tokens. The major difference between fungible tokens ( Bitcoin, Dogecoin and co) and non-fungible tokens (NFT) is that Bitcoins are synonymous to one and another, i.e 1bitcoin is the same as 1bitcoin in a different account, while NFTs are unique, individual NFT differs from another, each has a unique code associated to it alone.
NFT can be anything digital (such as drawings, music, your brain downloaded and turned into an AI picture of your house) but the current trend is using tech to sell digital art like the $69 million Beeples-Everyday art. People now have a digital collection of NFT arts just like they do the physical. Perhaps, the most obvious benefit of NFTs is market efficiency. The transformation of a physical asset into a digital one streamlines processes and reduce bureaucracy. NFTs representing digital or physical artwork on a blockchain removes the need for agents and allow artists to relate directly with their audiences.
As an artist, the NFT market can serve as a place where you sell your artworks, there is little or no marketplace for small artist to sell their arts. Also, NFTs have a feature that when enabled will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets super popular and balloons in value, you’ll see some of that benefit.
As a buyer, NFT is a platform you use to support artists that you like and also have the right to use the NFT art you purchased as your own(you can use them as your social media profile picture) it gives you the right to usage and a little bit of bragging right. Also, NFT can be purchased as a speculative asset, where you buy it with the hope of the price going up in the future, so you can sell it for profit.
Why are Non-fungible tokens important?
Non-fungible tokens are developed over the relatively simple concept of cryptocurrencies. Modern finance systems consist of complex trading and loan systems for different asset types, ranging from real estate to lending contracts to artwork. By enabling digital representations of physical assets, NFTs are a step forward in the reinvention of this infrastructure.
Conceivably, the most obvious benefit of NFTs is market efficiency. The conversion of a physical asset into a digital one reduces bureaucracy and removes intermediaries between sellers and prospective buyers. NFTs representing digital or physical artwork on a blockchain removes the need for agents and allow artists to connect directly with their audiences. They can also improve business processes. For instance, an artist can take a professional picture of his or her art and upload it on the NFT marketplace to connect directly with buyers, this is easier than the conventional method of going through an art gallery and other processes.
The most exciting possibility for NFTs lies in the creation of new markets and forms of investment. Consider a piece of real estate parceled out into multiple divisions, each of which contains different characteristics and property types. One of the sections might be next to a stadium while another is an entertainment complex and, yet another, is a residential district. Depending on its characteristics, each piece of land is unique, priced differently, and represented with an NFT. Real estate trading, a complex and bureaucratic affair, can be simplified by incorporating relevant metadata into each unique NFT.
Decentraland, a virtual reality platform on Ethereum’s blockchain, has already implemented such a concept. As NFTs become more sophisticated and are integrated within financial infrastructure, it may become possible to implement the same concept of tokenized pieces of land, differing in value and location, in the physical world.