Are you wondering what NFTs actually represent? Why are they so unique and famous across the globe? First of all, NFT, or non-fungible token, is a unique code record that cannot be copied and shared.
They are stored on a distributed ledger known as Blockchain technology and are typically associated with digital files such as photos, audio, video, etc. NFTs differ from other cryptocurrencies such as Ethereum or Bitcoin because they are fungible.
The owner can transfer these NFTs, which allows NFTs to be traded and sold. Anybody is able to create NFTs since it doesn’t require any coding skills to create. In order to determine the rarity of one particular NFT, the best thing to do is to use rarity tools from proven sources.
But what else describes these unique, non-fungible tokens? Let’s find out!
What are the main characteristics of NFT?
Since their advent, NFTs have operated based on “blockchain” technology and mainly rely on “Ethereum blockchain”. It differs from this popular cryptocurrency because it has some additional digital information.
Like cryptocurrencies, NFT is stored in a wallet and can be transferred from application to application. Blockchain technology represents the “logic of changing values”, and it has solved the big problem of divisibility, i.e. copying, so, for example, you cannot copy money.
You also cannot copy the proof of ownership. It is undoubtedly, one of the reasons why it is used by people who make NFT. The second reason is “smart contract”, that is, “smart contract”. It is best viewed as a program in which the contract terms are inserted.
For example, if you recorded a song and sold it, every time you change the owner, you will get the agreed percentage, not only for you but also for your manager and everyone who is in the contract. Everything goes automatically, and you are calm.
NFTs in the gaming and fashion industry
You have probably already heard about “crypto-cats”, which drove the planet crazy 5-6 years ago. There was an unprecedented frenzy, which led to the blockade of the “Ethereum” network. Users were allowed to buy, sell, exchange and money cats through “smart contracts”. The cat’s DNA was inserted into them, so, for example, no one knew what the newborn cat would look like during mating.
Nike did something similar in 2019 when they patented a blockchain-based CryptoKicks system. The system works so that when you buy sneakers, which are material objects, you also get a cryptographic digital proof of ownership and authenticity of the product. Someone in “Nike” played with “crypto-cats” before, so they also introduced the option of crossing different models of sneakers, and no one knows what the final product will look like. It seems that this is precisely what the whole story is about, giving charm along with proof of product originality.
A picture of a punk, an alien with a surgical mask, was sold for 12M dollars. It is part of the famous “CryptoPunks” collection, which generated over $ 2.5 billion on “OpenSea” alone (the most famous platform for NFT trading)!