Saturday, July 2, 2022

What is NFT? Why NFT Is In The News Recently?

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The first-ever tweet of Jack Dorsey was sold for $2.9 million as an NFT. After being transformed into an NFT, a Cat gif was sold for $600,000. Crazy! Right? If you’re a regular internet user, you’ve probably seen or heard the term NFT in news headlines, on social media, in memes, and elsewhere. Given the growing popularity of this new technology, it’s understandable if you’re wondering what’s up with this NFT craze. So, in this piece, we’ll try to clarify what is NFT? why it’s been in the news recently?. And too, in a layman’s language.

( Jack Dorsey: CEO of Twitter)

NFT! It is a term that is blowing a common man’s mind these days. People are going crazy about it. So, continue reading to know the reason behind this fad.

Also Read: 5 Latest Hot Crypto Currencies Of The World 2022

Points to be discussed:

  • What is NFT ? (in short)
  • NFT explained in detail
  • How NFTs are Sold or bought?
  • Why NFT has been in the News recently?
  • How to buy NFT?
  • Is it worth investing in?

What is NFT?

In a nutshell:

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  • Non-fungible tokens
  • Digital assets
  • Sold/bought on dedicated platforms
  • Use blockchain technology
  • Non-replaceable
  • Transfer of ownership
  • Speculative asset
  • Unique line of data symbolizing a digital asset

NFT explained in detail:

NFT refers to the virtual assets which are bought and sold online through blockchain technology. Non-fungible basically refers to something that cannot be replaced or interchanged. Since these digital assets are limited and one of a kind, they are referred to as non-fungible.

It allows you to create a unique line of data that represents a piece of art. Hence, it validates the uniqueness or originality of the asset that could be a meme, JEPG image, music, GIF, etc.

A non-fungible token is a piece of data stored on a blockchain that ensures a digital piece of material’s uniqueness.

  • Blockchain is a means of storing data in such a way that altering, hacking, or defrauding it is difficult or impossible. A blockchain is a digital record of transactions that is copied and spread across the blockchain’s network of computer systems.
  • Surprisingly, many NFTs which have been sold for millions already had their zillions of copies on the internet. Or in other words, were already reproduced many times before being converted into an online asset.
  • Last year, non-fungible tokens appear to have burst from the ether. These digital assets range from art and music to simple JPEGs at exorbitant rates with some fetching millions of dollars.
  • NFTs are used to exchange digital tokens related to a digital file.

Also Read: Warning- Google Drive Flags Folder Containing Only “1” As A Copyright Infringement.

Transfer of Ownership

The core concept behind NFTs is the transfer of ownership. It is quite crazy that people nowadays are spending millions of dollars to own just a tweet or GIF or JPEG.

  • We can understand NFT more easily if we compare it with the traditional practice of humans, i.e., to buy things that are scarce or antique, or unique for an enormous amount of money.
  • For example, a person had bought The last violin played on the Titanic for $1.7 million.
  • However, defining what constitutes art now is challenging. Today, digital assets can include something as simple as memes and animated GIFs.
  • Ownership of an NFT is frequently linked to a license to use the underpinning digital asset, but it rarely grants the buyer copyright. Some agreements only allow for personal, non-commercial usage of the underlying digital asset, while others allow for business use.

Read: What Is Blockchain Technology?

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Speculative Assets

NFTs are used as speculative digital assets. However, many experts criticize this technology. It is because a large amount of power is required to validate these blockchain-based transactions via a network of computer systems.

Economic bubble

As a speculative asset, NFTs representing certain digital items and artworks have seen a lot of use. Experts have dubbed the boom in NFT purchases an economic bubble.

How NFTs are Sold or bought?

Just like cryptocurrencies( Virtual currencies), people sell or purchase NFTs on dedicated platforms.

  • A sale does not always imply the transfer of the token’s described item.
  • NFTs of well-known artworks, for example, have been sold but the buyer has not received the original. What changes hands is the NFT’s certificate of ownership, which is recorded on the blockchain.. The certificate must be stored in a digital wallet, which can come in a variety of formats.
  • Like copyright, NFTs don’t actually restrict the usage or production of a digital asset. So, why are people exchanging NFTs for dollars? Well, the behavior of humans sometimes can be really unpredictable.
  • For example, In 2019, someone had bought a banana duct-taped to a wall at art basel for $120,000.
Image Source: www.refinery29.com
  • Also because NFT permits the buyer to keep the original item. It also has built-in authentication, which serves as proof of ownership. Additionally, the idea of ‘digital bragging rights’ also dominates the whole concept.

Why has NFT been in the News recently?

The first NFT appeared on the screen in 2014. However, the real craze of NFTs began in 2017 when an online game CryptoKitties made money by selling tradable cat NFTs, and its popularity raised awareness about this new technology among people.

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Additionally, it experienced a tremendous increase in its market in 2020. Since then, it has been making headlines. As a result, It began to pique people’s interests all across the world.

How to create NFT?

Honestly, the mechanism behind this latest technology is difficult to explain. In contrast, selling an online asset or item is straightforward. So below is how to do it:

  1. Go to an NFT platform such as Open Sea.
  2. Tap Create and then upload your file.
  3. Now, You may pay your listing fee in cryptocurrency.
  4. Further, sell your NFT by listing it.

How to buy NFT

In this last, there is one common question, i.e., how to buy an NFT. So, below is how to do it:

  • Connect your wallet to an NFT platform.
  • On most platforms, there is a simple ‘Connect wallet’ option.
  • Search or look for an NFT that appeals to you.
  • For purchasing NFTs, most markets use an auction system.
  • So, you must bid for the NFT you desire.

Is NFT worth investing in?

Well, first of all, it is generally advised to invest only a little amount of money in NFT at this stage. It is because NFT is a very new technology. Also, the value of these digital items is highly unpredictable. So, if you are buying an NFT for millions of dollars, possibly, you may not sell it in the future. Or in short, maybe it holds no value in the future.

Summing Up

So, this is all about What is NFT? why is it in the news lately? Additionally, this snippet also talks about how to create an NFT and how to buy one. If this article cleared your doubts about this latest phenomenon, kindly let us know in the comment section. Moreover, if you would like to ask any questions related to this technology, you easily do so in the comment box. We would love to hear from you.

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