Cryptocurrency is something that has been a topic of conversation for many years now. We have heard some mind-boggling stories about bitcoins, whether it’s the story of a man trading 10,000 bitcoins for 2 pizzas in 2010, which means those 2 pizzas are worth $432 million (₹ 30k crore) now.
Another instance where a man had to make peace with himself after forgetting the password of his laptop, in which he stored 7,002 bitcoins 10 years ago, that amount is worth 300 million dollars (22k crore INR).
In today’s world like bitcoin there are many cryptocurrencies available in the market. Cryptocurrency also introduced a term known to us as NFT, which is the reason for all the rage in the digital collectibles world.
NFTs – A Digital Realm
To understand the term we first look into what Fungibility means-
- Fungibility- refers to something replaceable or exchangeable. An asset or a good (ex- Gold or Silver) is a fungible asset if you can replace or exchange one part of it with another indistinguishable part. Gold, Silver, Wheat, Currencies, Oil, are all fungible goods. You can also consider fungible goods as common items that are not very rare, unique, or collectible.
- Non-fungibility –It is exactly the opposite of fungibility i.e. something unique and irreplaceable. An autographed book or a rare old coin is non-fungible as they both can’t be easily replaced. Consider non-fungible goods as rare and unique items.
What is NFT?
NFT stands for a non-fungible token, like any other non-fungible asset a non-fungible token or NFTs are basically something unique and irreplaceable.
NFT allows you to buy and sell ownership of unique digital items. NFTs are basically blockchain tokens representing a unique digital item. NFT can represent almost anything like art, graphics, music, videos, images, etc.
NFTs are part of the Ethereum blockchain so they are individual tokens with extra information stored in them. That extra information is the important part, which allows them to take the form of art, music, video (and so on), in the form of JPG, MP3s, videos, GIFs, and more. Because they hold value, they can be bought and sold just like other types of art – and, like with physical art, the value is largely set by the market and by demand.
NFT- World for Artists
For artists, stepping into the NFT space adds another space and format to create and share art – and offers their admirers another way to support their work.
The types of NFTs can be varied from the piece of digital art to a music file. Anything unique that can hold a value and stored digitally, could be considered as an NFT.
As NFTs are not interchangeable with each other, they may function as proof of authenticity and ownership within the digital realm. This helps artists to get rid of the insecurity of getting their artwork stolen.
If one downloads the work of an artist that doesn’t mean that he can know claim that piece of work to be his. As the downloaded file won’t hold the information that makes it part of the blockchain. It’s just like many copies of an original item can be made, but surely it doesn’t hold the same value as the original one. Therefore the work of an artist remains authentic.
Artists ascending themselves into NFT space makes another platform to create and share their artwork without having the insecurity of getting their work stolen or not getting the value for it.
NFT and Cryptocurrency
Anyone can sell an NFT. Anyone can create work, turn it into an NFT on the Blockchain, and put it up for sale on a marketplace of choice. One can even attach a commission to the file, which will pay you every time someone buys the piece – including resales. Much like when buying NFTs, you need to have a wallet set up, and it needs to be stuffed full of cryptocurrency.
Cryptocurrency and NFTs are now being used to map the digital world to the real world.
Digital collectibles open up blockchain technology to whole new avenues, outside of conventional financial applications. By representing physical assets in the digital world, NFTs have the potential to be a vital part of not just the blockchain ecosystem, but the wider economy.