What is NFT?

What is NFT?

NFT stands for non-fungible token; it is a digital asset that is converted or made from another digital entity. NFT gives unique ownership rights to any digital asset once when converted to NFT.

NFTs are not interchangeable like crypto currencies, or gold coins, or currency notes these are unique and don’t hold the same value even if they are identical in make or physical appearance.

One NFT can’t be replaced with another NFT like currency notes. Each identical NFT carries a different value. For example, if I have created an art piece and want to convert it into NFT, The blockchain technology will assign a unique code while converting it into NFT and makes that art piece a unique NFT.

Now, if these two unique NFTs are created from the same art piece and are traded on the NFT market place and possess the same value of 100$ they still can’t be exchanged with one another, because the blockchain code is not identical. Therefore it is clear that the blockchain code possesses the value and not that digital asset, ‘so again this is the Game of blockchain’.

Now confusion arises, what if I will make the second NFT to the same art piece? Is this possible, yes, once I send the same art piece for NFT conversion, the Block chain technology will assign the different code to the same art piece, for the blockchain technology doesn’t recognize the art piece but the blockchain code, hence the same art piece but two unique NFTs.

Why? Actually you are not trading the digital asset in the form of NFT but the Blockchain code, thus indirectly trading the crypto currency on the NFT markets.

There are many types of NFTs

1. Digital Art: Digital art is one of the most trending types of NFT. It can include anything- from digital paintings, digital drawings to digital sculptures and animations.

2. Digital Collectibles: This needs further elaboration:

What are Digital Collectibles?

The virtual goods, stuff or objects when collected in the digital form and stored at one virtual place are called Digital Collectibles. These digital collectibles are often traded in the same way as physical collectibles are traded. Some examples of digital collectibles are in-game items like weapons, virtual energy drinks, digital art etc. Some people collect digital collectibles for their own enjoyment, while some others trade them as a hobby or for profit. Digital collectibles are stored and tracked using blockchain technology represented by NFTs (Non Fungible Tokens).

3. Virtual Real Estate: Virtual Real Estate is the virtual land, buildings etc. Explanation: As the Gaming Industry is booming and the real-time playing possibilities found the way, the players often try to make their own battle fields or flyovers or buildings or bridges- to create the enthralling situations to win the game. Therefore the other creators have put all these things on the display on these gaming dashboards for sale at the cost of real currency.

The other form of Virtual Real Estate is the concept of Virtual World. The people who often try to live the virtual lives may need virtual plots, virtual bricks, and virtual mortar to erect their virtual world, but why they buy these NFTs? It is simple; if a common man can’t make all these things by himself in the real world, in the same way, how can, they make all these things in the virtual world? So they will buy it from others. And this process will also decide the pricing factor of an NFT.

4. Music: NFT will act as the perfect ‘antidote’ to the music piracy and may also allow artists to monetize their work in new ways and also give fans the opportunity to own the piece of music they love. NFTs can be used to represent the ownership right of any musical work. The musicians or artists can sell their music directly to fans through the NFT ownership rights. What is NFT?

5. Gaming: In gaming industry, the items such as weapons, arms and ammunition and other virtual assets can be sold, bought and treaded on NFT and Blockchain marketplaces where ownership can be easily verified and tracked. Some examples of games that are already using NFTs are Decentraland, Sandbox, Axie Infinity and Sorare. What is NFT?

6. Physical Assets when converted to digital: Like Fine Art also known as traditional art can also be represented and sold as NFTs, as unique, one-of-a-kind digital versions of the artwork.

7. Tickets: NFTs can also be used to represent ownership of tickets to events such as concerts, sports games, and theater performances. Instead of a physical ticket, an NFT can be used to prove that the holder has the right to attend the event. What is NFT?

8. Gifs: GIFs (short animations or videos that play on a loop) can also be represented as NFT, which can be bought, sold, and traded as digital collectibles. This allows creators of GIFs to monetize their work and for collectors to own unique, one-of-a-kind digital assets. NFTs can be used to represent ownership of a specific GIF, or even the rights to use a GIF in    a certain context. It also allows the creators to track their GIFs usage and get paid. What is NFT?

How are NFTs created?

To create an NFT, you must have a digital asset that you want to convert into an NFT, like a digital artwork or a gaming item, photographs or anything else that are available in digital form.

Digital art works like digital paintings are the favored items for NFT conversion. You also need to have a blockchain platform access that supports virtual currency platforms, like Ethereum and a digital wallet.

OpenSea, Binance are the favored NFT trading platform where you can easily convert your digital asset into an NFT and also you can trade these NFTs on the same platform with little fee.

What led people to think of NFT? What is NFT?

 It is a human curiosity to do something strange or unusual. First trade through Barter System=> precious metal exchange system=> coins=> currency note=>banks=>money bills=> Cheques => online Transaction=> payment cards => money wallets

The above mentioned are all government backed formal monetary systems. What is NFT?

Then came the Crypto Currency, this is the actual curiosity the man felt in the recent modern times may be to bypass the government sanctions in transacting the money from one source to another source. Many governments have no legal framework to control the emergence of virtual currencies or the virtual currency exchanges, but some currencies don’t allow the trading of virtual currencies while many countries are in between they neither have allowed nor have banned the virtual currencies.

Why do people invest in NFTs? What is NFT?

There are many believable reasons why people invest the real money in NFTs: What is NFT?

1. Some people invest in NFTs because they believe that they have the potential to appreciate in value over time. Just like with any other asset, the value of an NFT can go up or down depending on market conditions and other factors.
2. Passion for the content: Some people may invest in NFTs because they are passionate about the content that the NFT represents, such as digital art or in-game items. These individuals may be willing to pay a premium for an NFT that represents something they are particularly interested in.
3. Speculation: Some people may invest in NFTs as a speculative investment, hoping to buy low and sell high. These individuals may be motivated by the potential for quick profits and are willing to take on the risk of buying an asset that may go up or down in value.
4. Collecting: Some people may invest in NFTs as part of a collection, with the goal of owning a rare or unique item. These individuals may be willing to pay a premium for an NFT that is difficult to obtain or that represents something they are particularly interested in.

How NFTs Possess Value?

Some NFTs do have monetary value, while others do not. The value of an NFT is determined by a variety of factors, including the rarity of the NFT, the demand for it, and the perceived value of the item it represents. In general, NFT that is rare or in high demand are more likely to have a higher value. NFTs can possess value in a number of ways. Some factors that can contribute to the value include:

      1.Rarity: NFTs that are rare or hard to obtain are often more valuable than those that are more rampant or common.

      2.Demand: NFT that are in high demand, either due to their rarity or because they are associated with a popular games or community, are often more valuable.

3. Quality: NFT that are well-designed or have other aesthetic or functional qualities may be more valuable than those that are less impressive.
4. Perceived value: The value of NFT can also depend on the perceived value of the item it represents.

For example, an NFT that represents a unique piece of digital art created by a well-known artist is likely to have a higher value than an NFT that represents a less unique or less in-demand item. Similarly, an NFT that represents a rare in-game item or collectible is likely to have a higher value than an NFT that represents a more common item.

It is important to note that the value of a NFT can fluctuate over time and may not always be stable. As with any asset, the value of a digital collectible may go up or down depending on market conditions and other factors.

Are NFTs a sort of grey economy? What is NFT?

 It is not precise to say that NFT is a sort of grey economy. But it is true that NFT and other digital assets have the tremendous possibility to be used in a grey economy, such as tax evasions, money laundering etc. but the fact is that the ‘grey economy’ today exist in other different forms also.

NFTs and other digital assets can also be used for legitimate purposes, such as representing ownership of digital art, virtual real estate, or other virtual items. In these cases, NFTs and other digital assets can provide a secure and transparent way to track and transfer ownership, and can be an important part of the legal and legitimate economy.

The use of NFTs and other digital assets for illegal or illicit purposes is generally not condoned and can carry legal consequences. As with any asset, it is important to use NFTs and other digital assets responsibly and within the bounds of the law.

Does Law allow trading of NFTs? What is NFT?

Law generally allows the trading of NFTs and other digital assets because it recognizes the potential benefits and legitimate uses of these assets. Digital assets, including NFTs, can provide a secure and transparent way to track and transfer ownership, and can be used for a wide range of legal and legitimate purposes. What is NFT?

In many cases, governments have implemented regulations to help ensure that the use of NFTs and other digital assets is legal and responsible. These regulations can vary from one jurisdiction to another.

It is important to note that the use of NFTs and other digital assets is not completely unrestricted and may be subject to certain legal limitations depending on the jurisdiction. It is important to be aware of and comply with any applicable laws and regulations when using NFTs and other digital assets. What is NFT?

What is the future of NFTs? What is NFT?

It is very difficult to predict the future of NFTs. But they seem prospective enough to revolutionize the digital world. How humans possess and drive further the Digital world. Below are some possibilities…

1. Increased acceptability: As more people become familiar with NFTs and their potential uses, it is likely that they will become more widely adopted. And this could lead to the creation of new markets and industries centered around NFTs. What is NFT?

2. Greater mainstream acceptance: As NFTs become more common and widely used; it is likely that they will be more widely accepted as a legitimate form of ownership and value in the digital world. This could lead to the development of new ways to use NFTs, such as in the art world or in the gaming industry. What is NFT?

3. Development of new technologies: As the use of NFTs becomes more widespread, there is a possibility that new technologies and platforms will be developed to support them. This may include new blockchain platforms specifically designed for NFTs, as well as new tools and applications for creating and managing NFTs.  What is NFT? 

4.  Legal and regulatory developments: As NFTs become more prevalent, it is likely that there will be increased attention on legal and regulatory issues related to their use. This could include the development of new laws and regulations to govern the use of NFTs and protect the rights of NFT creators and owners. What is NFT?

In the recent times since 2020 NFT and NFT market Places thrived. More and more people are venturing into NFT market. NFT designers also emerged on the marketplace who sells their artwork to the potential NFT Traders. An astounding $180 million has been spent on NFTs since December 2017. What is NFT?

Conclusion:  What is NFT?

1. NFTs (non-fungible tokens) are digital assets that signify the ownership of a unique item or asset. They are often used to represent digital art, collectibles, and other virtual items. They can also be used to represent physical assets, such as real estate or fine art.
2. NFTs are unique and cannot be replaced with another identical NFT. They are stored and tracked using blockchain technology, and provide a way to authenticate and track ownership of digital assets. What is NFT?
3. Crypto Currencies are digital currencies that can be used for transactions.
4. Digital collectibles are virtual items that are collected and traded for their rarity or value, while as, and NFTs are digital assets that represent ownership of unique items or assets.
5. Crypto currency, Digital Collectibles, and NFTs are all related in that they are digital assets, they have some key differences and serve different purposes. Crypto currency is primarily used as a medium of exchange, while digital collectibles and NFTs are often collected and traded for their rarity or perceived value.

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