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What is an NFT?

NFTs (non-fungible tokens) are unique digital assets on a blockchain, representing various items like art, tickets, music, etc., serving as digital proof of ownership.

Non-fungible vs. Fungible

NFTs are akin to original art or limited-edition items—unique, with their value reliant on rarity and demand. Contrarily, cryptocurrencies are fungible—interchangeable and of equal value. A dollar exchanged for a dollar retains its value, but the value of a rare art NFT may significantly surpass another NFT.

How do NFTs work?

NFTs leverage blockchain technology—a secure, digital public record. With data spread across various computers or "nodes," blockchains are decentralized, meaning they aren't owned by a single entity but multiple individuals. This ensures security and unalterability.
Blockchains keep meticulous records of actions, making them excellent for proving ownership. Any activity regarding an NFT—creation, movement, purchase, or sale—is recorded on the blockchain, ensuring legitimacy. This information, available for public viewing, serves as a superior method of proving authenticity compared to physical documents susceptible to loss or damage.
For instance, purchasing art with NFTs allows for verification of the artwork's complete history—owners, sales, and origin—eliminating the risk of acquiring counterfeits.

The impact of NFT technology

Blockchain technology revolutionizes the handling of digital items. NFTs bestow digital items with uniqueness, public transferability, and authenticated ownership. This opens new avenues for creators to monetize their works through blockchain-based marketplaces and earn from secondary sales.
For collectors, NFTs enhance the purchasing experience by verifying the ownership history of items like concert tickets, ensuring authenticity.

NFT applications

NFTs cater to various uses, including:
  • Art - NFTs are revolutionizing the art world by allowing artists to digitize their works, validate their authenticity, and sell them directly to collectors.
  • Profile pictures - NFTs of unique digital profile pictures, like Kanaria, CryptoPunks, or Bored Apes, have become symbols of status and identity in the virtual world, owning exclusive rights to specific images.
  • Collectibles - Digital collectibles, like CryptoKitties or NBA Top Shot moments, leverage NFTs to prove ownership and rarity, creating a booming online marketplace for unique items.
  • Domain names - Blockchain-based domain names as NFTs give users true ownership and control over their digital addresses, paving the way for a decentralized web (web3).
  • Ticketing and membership - NFTs are being used for ticketing and membership access, providing provable, non-duplicable digital tokens that can represent event tickets or membership privileges.
  • Gaming - NFTs bring real-world value into gaming, allowing players to truly own, sell, or trade their in-game items, characters, or assets, enhancing the virtual economy.
  • Virtual worlds / Metaverse - In virtual worlds or metaverses like Decentraland, NFTs are used to own, trade, or sell digital real estate, outfits, and more, building an entirely new virtual economy and society.

How NFTs are bought and sold

NFTs are traded on specialized marketplaces like Singular. All marketplaces are different— some specialize on only one blockchain, some are exclusive and curated, while some focus on certain kinds of NFTs. Singular is the most advanced NFT marketplace–allowing for the creation of NFT 2.0 (aka. NFTs with superpowers). w

FAQ

Are NFTs a passing fad?

NFT technology redefine the ownership and monetization of digital assets.

What if I lose my NFT?

Losing your digital wallet may result in losing access to your NFT. If the servers hosting the associated media are offline, it might be inaccessible.

Can I just save or screenshot an NFT?

Saving or screenshotting an NFT doesn't grant ownership. It's akin to photographing the Mona Lisa—you possess a copy but not the original, and cannot sell it at its actual value.

Are NFTs environmentally harmful?

Some argue the energy needed to maintain blockchains, where NFTs reside, harms the environment. However, some blockchains, especially proof-of-stake-based, operate carbon-neutrally, minimizing environmental impact. Singular runs on PoS blockchains like Moonbeam.

Do I need coding skills to make NFTs?

Creating an NFT doesn't require coding skills. Tools like Singular facilitate NFT creation sans coding. For the adventurous, learning to code smart contracts could be an option.
Last modified 6mo ago