NFT or Non-Fungible Token is a cryptographic token that acts as a non-duplicable digital certificate of ownership for any digital asset. Any item could be secured online by an NFT. To do this the item must be put in place using an open-source code. Once the code is put in place, it is minted or published permanently using a token (NFT).
There has been a recent arrival of NFTs in the mainstream and a subsequent boom in their popularity and value on global platforms. Consequently, NFT-based artworks in particular have shaken all corners of the world, with art collectors now spending unimaginable amounts of money just to secure digital ownership of their favourite works. With NFTs progressing from a niche interest to a global craze; the NFT artwork movement has been steadily growing and has seen buyers, who are connected to artists via online marketplaces such as Nifty Gateway, Larva Labs and Open Sea, snatching up digital artworks at increasingly high prices.
For instance, On February 15, 2021, the venerable auction house Christies, founded in 1766, became the first to announce plans to sell a purely digital piece of art—an NFT created by digital artist Mike Winkelmann, aka Beeple. The piece ‘The First 5000’, comprises 5,000 individual images created every day from 2007 to 2021 and posted on Beeple's Instagram.
The word “fungible” is an adjective used to describe something replaceable by another identical item, something that is mutually interchangeable.
NFTs are a class of cryptocurrency assets in which each item, or token, is entirely unique. This attributes close to no value to them as a currency, but quite useful for things such as creating wholly unique digital art.
While the use of NFTs are now limited to creating and selling potentially multi-million dollar digital trinkets; the other most obvious use of unique, hack-proof virtual tokens is storing data of all sorts including private and public data, for example a birth certificate and health data and even money and land records.
More importantly, NFTs could one day revolutionize the way we create and execute agreements to exchange money, shares, property, or virtually any other asset through smart contracts. These digital contracts could one day replace the need for a third-party arbitrator, and instead use a computer program on blockchain to confirm that the conditions have been met.
This article has been written by Kyra Songadwala for The Paradigm.
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