Since November 2017, there has been a total of $174 million spent on NFT. On 21st March 2021, the first-ever tweet of Twitter CEO Jack Dorsey’s “just setting up my twttr” was auctioned as an NFT and bought by a Malaysian-based buyer Sina Estavi for $2.9M, which is €2.1M.
If you also think of the NFT as cryptocurrency, you’re not alone. This article will explain all you need to know about NFT and its unique characteristics. You can also find more information on cryptocurrency blogs across the internet.
What Is NFT?
NFT is an acronym for Non-Fungible Token. But beyond the abbreviation, an NFT is an evolution of art collections where digital art and other collectibles like paintwork, texts, pegs, video clips, and the likes, are being traded as a token in the blockchain market and cannot be subdivided into units.
By blockchain, you might be wondering if NFTs are the same as cryptocurrencies. The similarity between NFT and a cryptocurrency is that both are encoded with the same programming.
This means that they are created using a smart contract on the blockchain and can be transferred from wallet to wallet in a secured way.
However, NFT, unlike every other cryptocurrency, is non-fungible meaning that it is unique and whole on its own and cannot be interchanged with another NFT. Even the ones from the same collection or artist owner. This is because each NFT has its specific information and characteristics.
A cryptocurrency can be exchanged, traded, or converted into fiat or dollars. And the value of a cryptocurrency is always equal to the value of the currency that it is being exchanged with. Meaning that the value of a bitcoin is always equal to the value of the bitcoin that it is being exchanged.
NFT on the other hand is not equal to the value of another NFT because of its unique feature. It cannot be interchanged or exchanged with another. The value of an NFT is dependent on the value of the currency used in buying it. The original artist of the NFT can still maintain copyright and reproduction rights.
Characteristics of NFTs
Compared to other digital assets, an NFT has unique characteristics that distinguishes it from other digital assets, below are those characteristics.
#1. It is Indestructible
The data is stored on the blockchain via a smart contract, therefore the token cannot be replicated, interchanged, or destroyed.
#2. It is Verifiable
NFTs can be traced back to their original creators and can be authenticated and stored on the blockchain without a third party.
The original creator can still maintain copyright or commercial right of the NFT unless stated otherwise.
#3. It is Unique
The features in an NFT are different from the features in another. For example, a Mooncatrescue cannot be used on an Illuvium.
And this is the same with other collectibles. It is whole and different on its own.
#4. It is Indivisible
NFTs cannot be divided into smaller divisions as they can only be bought and sold whole.
Conclusion
It is important to note that an NFT is volatile in value, and the purchasing price in getting an NFT can be different from the selling price. For instance, Jack Dorsey’s tweet that was bought for $2.9 million barely sold above $285 a year later.
NFTs can be used for, Ingame items, Artworks, Identity, Collectibles, and so on. And you can buy one at any of the popular NFT markets, Opensea, Nifty Gateway, and NBA Top Shot.
