What is Non-fungible Token (NFT)?
An NFT is a digital asset that represents real-world artifacts such as art, music, in-game items, and videos. They are purchased and traded online, frequently using cryptocurrency, and are typically encoded using the same underlying software as many cryptos.
Understanding Non-fungible Token (NFT)
Non-fungible Tokens (NFTs) have been around since 2014, but they are gaining popularity currently as an increasingly popular means to acquire and sell digital artwork. The market for NFTs alone was approximately $41 billion in 2021, which is approaching the total value of the worldwide fine art industry.
NFTs are also typically one-of-a-kind, or at the very least one of a very limited run, with unique identification codes.
This is in sharp contrast to the vast majority of digital inventions, which are virtually invariably endless in quantity. Cutting off supply should theoretically increase the value of a particular asset, if it is in demand.
However, many NFTs have been digital works that already exist in some form elsewhere, such as legendary video clips from NBA games or securitized versions of digital art that is already circulating around on Instagram.
Individual images—or perhaps the full collage of images—can be viewed online for free by anyone. So, why are individuals prepared to spend millions of dollars on something that can be readily screenshotted or downloaded?
Because an NFT permits the buyer to retain ownership of the original item. Furthermore, it includes built-in authentication, which acts as proof of ownership. Collectors appreciate “digital bragging rights” nearly as much as the thing itself.
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