It’s fun to talk about non-fungal tokens, or NFTs, because they are a good example of how blockchain technology can affect people’s lives and bypass the financial market. As you can see from hundreds of headlines in recent months, it has caught the attention of the whole world because it is a new way of interacting with culture, music, sports and media.

This article will explain what NFTs are, how they work, how the NFT boom started, and why blockchain technology allowed NFT to create a new economy.

Related Topics: A Cure for Copyright Diseases? NFTs promise to strengthen the creative economy

Why are NFTs so worried?
NFT is an interesting and fun topic of conversation because almost everyone loves music, art, games and the Internet. Every social media feed is filled with people who have never shown interest in the crypto-ace or decentralized economy, and who are passionate about indestructible tokens. In the first half of 2021, we saw many celebrities and memes who supported NFT.

Twitter CEO Jack Dorsey sold his first tweet as an NFT for a staggering $ 2.9 million in March last year. Edward Snowden’s NFT painting, a portrait of Snowden himself, sold for approximately $ 5.4 million dollars or 2224 Ether (ETH).

The NFT meme by Zoe Roth, known as “Disaster Girl” because of her sly 2005 (and later) smile that looked at the camera while the house was burning in the background, was sold as an NFT for 180 ETH, which is about $ 500,000 dollars.

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Furthermore, traditional market companies have decided to ride the NFT wave. In Brazil, for example, the first NFT Havaianas collection was auctioned last month.

The NFT transaction volume has increased by more than 25 since December 2020 as NFTs enter people’s everyday lives. It could be one of your favorite songs, a cartoon about your favorite superhero or an instrument in a game that your kids want. In the following graph, we can clearly see the growth in NFT transactions over the last six months, as well as business volume since the end of the third pre-pop period last quarter.

What is NFT? How do they work?
We can visualize NFT as a software code that verifies ownership of a non-durable digital asset, or as a digital representation of a non-durable physical asset on a digital medium. For those who prefer a more technical look:

“NFT is a type of smart contract that provides a standardized method of verifying the owner of an NFT and a standardized method of ‘transferring’ indestructible digital assets.”
In this case, all real estate can become a target for NFT, be it domain names, tickets to an event, cryptocurrencies in games or even identifiers on social networks such as Twitter or Facebook. All of these indestructible digital assets can be NFT.

NFT contains a data structure (token) that links metadata files that can be captured in an image or file. This token is moved and modified according to the requirements of blockchain networks such as Ethereum, Kusama, Flow and others. The technical file is uploaded to the blockchain network, which creates a metadata file in the token data structure.

As a content creator like the digital artist Beeple or the rock band Kings of Leon, you upload your work to a platform that takes the file’s metadata and sends it through the entire internal product process, also known as NFT.

Your NFT then receives a cryptographic hash (key) – a tamper-resistant, date and time posted sent over the blockchain network. It is important for any artist to keep track of valuable data and know that they have not been changed later.

If you put your drawing in a string, you can get a better idea of ​​when to convert the art movie data to a token. Since the piece data is loaded, no one can recover or delete it, and the chances of your artwork disappearing are virtually non-existent if your NFT is registered in the blockchain.

How has blockchain technology doubled the potential of NFTs?
Until 2008, traditional NFTs did not have a consistent representation in the digital world. As a result, it was not standardized, and the NFT markets were closed and limited to the platforms that issued and created certain NFTs.

The first NFTs on the blockchain began with the advent of colored coins on the Bitcoin blockchain. Although originally designed to offer Bitcoin (BTC) transactions, their scripting language stores small amounts of blockchain metadata that can be used to represent asset management instructions.

On the other hand, the first NFT experiment was based on the Ethereum blockchain CryptoPunks, created by Larva Labs, which consisted of 10,000 “unique” collection blocks.

Source: CoinTelegraph

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