Do you know what these world-famous NFTs are all about that have grabbed the attention of all to it? NFT…
Browsing: Non-Fungible Token (NFT)
History of Non-Fungible Tokens
Non-Fungible Token was created long before it became popular in the mainstream. Reportedly, the first NFT sold was “Quantum,” designed and tokenized by Kevin McKoy in 2014 on one blockchain (Namecoin), then minted and sold in 2021 on Ethereum.
How NFTs Work
NFTs are created through a process called minting, in which the information of the NFT is recorded on a blockchain. At a high level, the minting process entails a new block being created, NFT information being validated by a validator, and the block being closed. This minting process often entails incorporating smart contracts that assign ownership and manage the transferability of the NFT.
Examples of NFTs
- Photography: Photographers can tokenize their work and offer total or partial ownership.
- Sports: Collections of digital art based on celebrities and sports personalities.
- Trading cards: Tokenized digital trading cards. Some are collectibles, while others can be traded in video games.
- Utility: NFTs that can represent membership or unlock benefits.
- Virtual worlds: VIrtual world NFTs grant you ownership of anything from avatar wearables to digital property.
- Art: A generalized category of NFTs that includes everything from pixel to abstract art
- Collectibles: Bored Ape Yacht Club, Crypto Punks, and Pudgy Panda are some examples of NFTs in this category
- Domain names: NFTs that represent ownership of domain names for your website(s)
- Music: Artists can tokenize their music, granting buyers the rights the artist wants them to have
Benefits of Non-Fungible Tokens
Investing
NFTs can represent ownership in a business, much like stocks—in fact, stock ownership is already tracked via ledgers that contain information such as the stockholder’s name, date of issuance, certificate number, and the number of shares.
Security
Non-fungible tokens are also very useful in identity security. For example, personal information stored on an immutable blockchain cannot be accessed, stolen, or used by anyone that doesn’t have the keys.
Are NFTs Safe?
Non-fungible tokens, which use blockchain technology like cryptocurrency, are generally impossible to hack. However, the weak link in all blockchains is the key to your NFT.
Summary
Non-fungible token is an evolution of the relatively simple concept of cryptocurrencies. Modern finance systems consist of sophisticated trading and loan systems for different asset types, from real estate to lending contracts to artwork. By enabling digital representations of assets, NFTs are a step forward in the reinvention of this infrastructure.
