What is NFT?

NFTs are available from 2014, however it is not until 2020 that people begin to use their crypto currencies to purchase artwork. NFT has swept the art and technology worlds. People are enthusiastic about NFTs, and they're willing to pay millions of dollars for them. The introduction of Facebook Meta has ensured that NFT will be around for a long time. There are still questions concerning the longevity and underlying merit of the art being generated.

NFT is a one-of-a-kind cryptographic token that denotes ownership of both digital and physical assets.

An NFT is created, or “minted” from digital objectives that represent both definite and intangible entries, including 😛 TAGEND

Fungible vs Non-Fungible

A fungible good has a standardised value measurement, with each unit is equal to another unit of the same item. Fungible items are exchangeable. Bitcoin, Ether or any other cryptocurrencies, for example, are fungible. 1 Bitcoin can be exchanged for another 1 Bitcoin. There is no distinction between each Bitcoin, and we do not regard them as exceptional, distinctive, or valuable in their own right.

NFTs, on the other hand, are identical and unique cannot be exchanged— a digital art, music or just a screenshot like the one sold for 2 Million USD. – that cannot be replaced. Each is distinct from the others, and digital assets traded as NFTs may not even be of equal worth within a series. For instance, BAYC has 10,000 items in opensea and each one is unique and current price varies from 0.1 ETH to hundreds of ETH.

What are NFTs used for?

Artists have a one-of-a-kind opportunity to monetize their work thanks to blockchain and NFTs. They are no longer reliant on art galleries or shows to sell their products. They can directly sell the things on NFT marketplaces such as Opensea and Rarible. They can determine the royalty percentage on additional sales of the work by the buyer to another customer in addition to selling it.

How to invest in NFTs?

It's more than just a stock or commodity purchase. We must comprehend the blockchain's operation as well as the digital design. When investing in NFTs, we should keep the following points in mind.

• What a difference it makes to you.
• Is it original or a copy?
• Is it hand-drawn or made with AI tools?
• Is there any physical property associated with it?
• Who developed the collection and how much it is worth

Steps to Buy a NFT

• We need to make a digital wallet. like MetaMask.
• Select the best Marketplace and NFT Collection for you.
• Examine the Gas Fee and make a comparison.
• Make your choice.

What happens when you buy a digital art?

When you buy art, the platform generates a Token that is signed with your private key. This token would hold the Asset or Art's Metadata. This token is kept on the blockchain. This indicates that it is a one-of-a-kind token for the individual who purchased, obtained, or created it. The real asset is kept off-chain, rather than on the block-chain.

NFT Tokens cannot be duplicated, but the underlying asset can be duplicated several times with slight differences.

Because digital files are so easily copied, US courts have refused to recognise a "digital first sale" concept — under copyright law, there is no such thing as a unique digital media asset that can be bought and sold on the secondary market because media files are essentially viewed as fungible.

Lets Explore how it is being stored.

We randomly selected BAYC NFT and look in to the details.

https://opensea.io/assets/0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d/4494. This is the NFT's website address. The NFT token is 0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d. On etherscan.io, we can see the token's transaction history. We can check the details as well as the transactions of the token by pasting it into the etherscan website.

We can know from etherscan the complete ownership of this NFT.

When we inspect the image URL it points to some cloud server. https://lh3.googleusercontent.com/ebEjooBuQozR9PBEmGBNdSN7sMkkj3KB17nEVexLg5_yyNg-cJhKB22jYIj5CwdTitU3lFldI1C-8mDTNnRw3TUL5UAMc9zaUkgIsw=w600

You can copy the URL and paste it in the browser, the image will be download to your local machine.

We can deduce from this that the image is stored off chain and that anyone can obtain it. The token is the only item kept in Blockchain. The token, not the image, is traceable, and thus cannot prevent someone from downloading it.