In less than a year, the acronym NFT has gone from WTF to BFF for brands. Non-fungible tokens are digital assets like bitcoin, only they’re unique and irreplaceable, like owning an original work of art online.

They utilize the same authentification technology like cryptocurrency and, similar to the digital dough, are still nebulous in their uses. 

DEFINITION

In the world of cryptographic assets, there are two fundamental types: crypto-currencies (fungible tokens) and non-fungible tokens. The difference between them is their fungibility, mutual substitutability, or more simply, their sameness.

Assets on a cryptocurrency chain like Bitcoin are fungible in that every Bitcoin is the same (similar to cash). Assets on a non-fungible chain are unique – there is only one copy of each token, so think of these like ID cards or passports.

NFTs have practical, real-world utility because they offer a cheap and ubiquitous way to create verification of ownership and transaction history for anything, without needing some type of trusted central authority to act as a trusted intermediary between parties.

Examples of these intermediaries are government records offices, escrow and title companies, and registries.

NFT’S ARE VALUABLE TO THE MARKET.

Needless to say that digital art is one of the dominating forms of modern art. But, the problem with digital content or art is that it can be copied easily, and there can be n number of copies available on the Internet.

What is needed is the authentication of the original art. A Netflix documentary on fraud art, titled Made You Look, very well explains the importance of authentication in the art world.

NFT has emerged as a solution that can indisputably authenticate the original digital art.

The artist can create an NFT for his digital art, which will create an indestructible and immutable record in the Blockchain and thereby will certify the art as original and unique.

The artists can also use NFT to monetize this artwork. Over NFT marketplaces, he can sell his NFT directly to an interested buyer.

Blockchain smart contracts facilitate NFT trading, and the transfer of ownership from the seller to buyer gets recorded in Blockchain. This way, an NFT always functions as an authentic proof of ownership.

The NFT and the future of art

NFTs are digital assets that function a lot like cryptocurrencies. They can be used to purchase products and services and represent real-world assets.

Perhaps, the most exciting thing about NFTs is that they will bring about massive changes to the way the stock market works as well as the way that cryptocurrency works.

NFTs are also going to make it easier for people to invest in companies and economies all over the world. 

NFTs are a solution to digital scarcity. By tying ownership of natively digital artwork to an entry in a public, immutable ledger, the artwork becomes collectible.

There is now a clear, verifiable way to distinguish the actual owner from those right-clickers who happen to have a copy on their hard drive.  

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