Tech Corner: April 2023
Topic: What is NFT and how does it work?
What is this new word, NFT, that’s been floating around the digital scene over the past few years? If you are like the majority, you’ve heard this term, someone started to explain what it was, and you still have no idea what NFT is or how it works. Sound familiar? You are not alone!
In its simplest explanation, NFT, is a non-fungible token. NFT utilizes the same blockchain technology as cryptocurrency such as bitcoin. This “token” is used to create a unique digital identification for an item, asset, or “thing” and cannot be copied, substituted, or divided. Thus, where the term non-fungible comes into play.
In contrast, fungible assets, are interchangeable and not as unique from one another. An example would be a $100.00 bill, which could be traded for another $100.00 bill, or could be divided into 5 x $20.00 bills. The same can’t be said with Non-Fungible assets, as they are one of a kind and can’t be traded like-for-like, or divided down into something else.
NFT’s turn digital assets into one of a kind, by creating a digital signature, defining a true ownership, and securing the authenticity of an item. The most common example of NFT applications are Games, Artwork, or Music.
These non-fungible tokens are not interchangeable, they are unique, and owned by a particular person. The creation of this digital certificate makes this item unique, highly valuable, and highly sought after as the buyer can be sure it is authentic and one of a kind.
An easy way to understand NFT is to equate it with a collectible. It maintains that collectibles authenticity, secures it from forgery attempts, and gives it major significant value.
If you are wondering whether NFT transact into real value or actual common-day currency. The most expensive NFT that has been sold to date is an artwork called “The Merge” which sold for 91.8 million.
In fact, in the growing crypto-world, 40% of new users are solely for NFT entry points. NFT could represent a very significant part of the world economy in the near future and has really taken off since 2001.
NFT has enhanced media exposure, enhanced perks, creating new opportunities, new platforms, and reducing copyright theft and forgery, thus increasing overall value.
By no means does this tech article make you an expert on the subject, but hopefully it gives you a little more understanding as to what NFT is and encourages you to want to learn more.