Non Fungible Token Explanation

Non fungible token (NFT ). Firstly we will break it into two terms “Non fungible” and “token”.

Let’s understand what is Fungible and Non Fungible ?

Fungible means replaceable. You can exchange one item with another one. For e.g – You have a note of $100 and now you can replace it with 2 notes of $50 . There is no difference in the value in both cases.

Non fungible means Non replaceable .You can’t replace an item that has an unique value with another one.For e.g – There is only one Mona Lisa’s painting in the world made by the famous painter Leonarda da vinci .Now that painting has an unique value and you can’t replace it with some another painting.

As say your house you have memories ,emotions attached with it so it has an unique value. You can’t replace your house with someone else’s house.

One another example lets suppose that your father gave you a pen on your birthday as a gift and now that pen has an unique value .You can’t exchange that pen with any other pen in the world. Anything which is original or unique we can call it Non Fungible.

What is a token ?

As in real world whenever you purchase a property or house you got some legal documents as a registration proof that you own that particular property or house .Same as token is the digital proof of ownership of any item.It proves that you own that unique item.

Let’s understand the technology on which NFTs are based ( Blockchain )

Blockchain is basically a network of computer which all have same history of transactions.It is a highly secure technology.

In real life if you send a payment to anyone there are banks involved in which holds the record of your transactions.

But blockchain is decentralized there are no banks involved in it.

For e.g – I gave you 1 token of an item and you got it .Now that transaction between us is recorded on blockchain for forever and ever .No one can delete or edit it.Thats the concept of NFTs.

Experts believe that blockchain technology is here to stay.

How Non fungible token work ?

Let’s suppose you have an unique item and you wanna sell it .Now question comes up in mind that how do you prove the ownership of that one unique item ?

You can prove the ownership of that one unique item by creating an NFTNon fungible tokens (NFTs) are a legit way of proving and transferring the ownership of an item .

Now you must be thinking that why i will spend money on an NFT if i can download it and can also take a screenshot of it.

Let’s suppose a digital edition of a poster of a movie “Titanic” is now available as an Non fungible token and

When you buy that NFT , you will receive a token as the proof of ownership of it .

Now when it’s time to sell it and take advantage of some real life benefits which are given with it , You can get all of this only when you have the proof of ownership of that NFT not by just downloading or take screenshot of it .

No matter how many times you replicate, download or screenshot it , you can never be its rightful owner.

How Non fungible token can be used ?

Singers can sell NFTs and include special benefits like front row seats to the holders in every concert.

Some respected athletes have also sold their NFTs and have included benefits like a signed jersey by them.

NFT made by an athlete has a limited supply and there is large audience who wants to buy it, now you can imagine how high its price will go.

As in New York a restaurant launched by GaryVee . In which membership is purchased by an NFT and token holder will get access to that restaurant.

GaryVee stated that people who own the NFT might want to eat there 4 or 5 times and then sell the token for profits.

NFT allow creators to directly connect with their audience.

In future may be schools, colleges and universities start giving you certificates as NFTs.

How to buy NFTs ?

As in real world you need money to buy anything and you can keep that money in your physical wallet

Same as in NFT world you need cyptocurrency to buy anything and you can keep your cryptocurrency in your digital wallet .Ethereum is the dominant cryptocurrency in NFT world .

Now you have money in your wallet and you wants to buy something . To buy something you have to go to a place called market.

Same as in NFT world to buy anything you have to go to a marketplace. Now it’s up to you that which marketplace do you choose. Open sea is the largest and leader marketplace in the NFT world and where you can buy any NFT.

To buy an NFT you have to pay a fees called gas fees to the platform which is required to run the transaction. Once your transaction is done now it is recorded on blockchain for forever and ever. No one can edit or delete it.

Is it worth investing in NFTs ?

After some investors made millions from NFTs ,now you must be thinking that I should also get in on the hype.

You can think of an NFT as a digital form of art whose value is going to increase in the future.

An NFT cannot be copied, meaning it is scarce. The only one owner can claim ownership of an NFT which makes it as much more scarce.

On OpenSea over half of the sales were under $200 and one third of the sales were under $100.

For most NFTs, prices don’t go past $300. Invest as much money as you can stand to lose.

We are in the very early stage of NFTs. It have endless possibilities.You can experience the digital form of art by buying an Non fungible token.

In the coming years everything is going to be digital.

The future of NFTs will be huge since companies are able to share exclusive access to virtual things with their customers or fans via limited-edition tokens which can’t be exchanged or copied.

To know more about the future of NFTs you can click here Non Fungible Token Future