What are NFTs?
How important are NFTs?
The importance of NFTs lies in providing the ability to securely value, buy and exchange digital art using a digital ledger. Here are some of the crucial characteristics of NFTs.
Indivisibility: It is impossible to divide NFTs into small denominations as they exist in a complete form.
Verifiability: One can store the historical ownership data on the blockchain. The items like digital artwork are easily traceable from the original creator with complete authentication without any necessity of third-party verification.
Indestructive nature: It is impossible to destroy, remove or replicate NFTs as the overall NFT data is stored on the blockchain network through smart contracts. The ownership of non-fungible tokens is immutable. It means that collectors or gamers possess their tokens and not the companies which generate these tokens.
NFTs are bought and sold on marketplaces, there are many marketplaces, we'll feature some bellow!.
OpenSea, The largest NFT marketplace
OpenSea is an American online non-fungible token marketplace headquartered in New York City. The company was founded by Devin Finzer and Alex Atallah in 2017.
Fungible Vs Non-Fungible Tokens
What is the Difference Between Fungible and Non-Fungible Tokens?
If an asset is fungible, it basically means that you can exchange it for another one of the same kind, and it will hold the same value. It’s interchangeable.
Think about a five-dollar bill. If you exchange it for another five-dollar bill or five one-dollar bills, you receive exactly the same value in turn. Or take, for example, a cryptocurrency like Bitcoin. Each token is an exact copy of the others; you receive the same value when you trade one bitcoin for another.
Moreover, fungible assets can be divided into smaller units. For example, one dollar can be divided up to one cent, and Bitcoin can be divided up to 0.00000001 BTC.
Non-fungible assets aren’t interchangeable. Some examples from the physical world are a painting, a trading card, or a concert ticket. Note that you can’t split these assets into smaller units, unlike fungible ones. They’re unique.
Types of NFTs
There’s no bar as to what’s counts as an NFT, it’s safe to say anything can be an NFT — and that isn’t far from the truth.
NFT’s diverse use cases and unique tracts can be attributed to its growing scope for innovation and developing infrastructure.