Anyone who has opened social media or turned on the news over the last year has seen the acronym NFT present somewhere. The amount of discussion surrounding them begs the question of what is an NFT? This new avenue of technology has taken the world by storm as people have attempted not only to understand them but also to make a profit from them. When a trend that involves significant amounts of money and potential takes place, it is very simple to hop aboard and hope for the best without full clarity on the details of the trend. However, in many cases, this is not the best decision for any person’s wallet. To avoid any rash or potentially harmful decisions related to NTFS, it is important to understand three questions. First, what is an NFT? Second, what does an NFT do? And third, why are they powerful?
What is an NFT?
Without a rudimentary knowledge of the digital asset, diving into the intricate details surrounding NFTs is incredibly unadvisable. First and foremost, is what NFT stands for – non-fungible token. Now, if this leaves you with no greater understanding of the technology, that’s normal – fungible is not an everyday word. In this case, fungible means that the item it pertains to is irreplaceable and a one-of-one. While this may seem vague on the surface, it will make much more sense after walking out the concept. NFTs are digitally stored items that are made possible through blockchain technology which is a computer system built with high security and immense visibility in mind. As NTFS has taken off recently, a seemingly endless number of unique uses for them have continued to appear. From music to art to story characters or even pieces of internet history, people continue to find new ways to use technology. If someone was to purchase one of these NFTs, it would be digitally signed over to them without the chance of another person owning it. This means that NFTs are collectible by nature and, by extension, valuable. But what is it about NFTs themselves that are so desirable? A portion of this has to do with their functionality.
What does an NFT do?
With the original question of, what is an NFT, out of the way, we can look at what they do. Honestly, a better way to ask this question might be, what doesn’t an NFT do? You would be hard-pressed to find a concrete answer to this question. It’s already been established that NFTs can be a store of value. Although, this doesn’t account for how the internet has propelled the technology to unprecedented heights. Creativity is synonymous with the internet. It has become a place of collaboration and the spawning point of ideas. Seeing as NFTs are so prominent online, the internet’s creativity has lent itself to creating more uses for NFTs than one can shake a stick at. Do you want to hold an NFT that allows you to vote on the storyline of a book written by a New York Times bestselling offer? It is entirely possible. Or, if you’re a sports fan, you can purchase NFT trading cards of your favorite players or teams. The point here is that, as of now, there have not been noticeable limitations for what an NFT can do or be. Anyone can sell one, anyone can buy one, and anyone can design one for their specific desires. After realizing this, it should be very apparent why NFTs have become popular as there’s something for nearly everyone here.
Why are they powerful?
Each time a new use for an NFT is presented online, it becomes another answer to the question above. NFTs are powerful because they have immense flexibility. Time and time again, people have demonstrated their wonderful ability to take the potential of NFTs and turn them into something refreshing and dynamic. Part of this is simply due to the technology behind them. The blockchain allows any user to prove without a shadow of a doubt that they are the owner of an NFT. Think about the opportunities that come with ironclad proof of ownership. Security can be taken to the next level because there is no way to imitate the incredibly particular elements of an NFT because they are digitally coded and stored. The days of art theft or loss are gone, at least digitally. Furthermore, their current standing in society has lent itself to the power and popularity of NFTs. If you watched the Super Bowl, you saw a commercial featuring some of the largest celebrities alive talking about crypto, the technology NFT is based on. Seeing as there is not a financial system such as gold backing the worth of NFTs, having some of the most influential people onboard supports the idea that NFTs have gained a powerful footing in society.
Hopefully, the question of what is an NFT has been answered in full and without confusion. Between their prominence and value of them, it’s necessary to make sure you have a grasp on what they are before taking the leap into the metaverse.