Why is everyone talking about crypto art or what does NFT mean? What are NFT's or Non-Fungible Tokens? How do they work?
Due to its novel features and the great speculation behind these "digital assets" there are many people who do not fully understand what it is about 100%, so today We will give you the best and simplest explanation about NFT's that you will find on the web.
What are NFT's?
The acronym NFT means Non-Fungible Token, which is: non-fungible asset, object or value. The term "fungible asset" means: A thing characterized by its specific individuality and that allows its substitution by another. With which we can conclude that an NFT is a digital good, or rather, a digital asset that cannot be exchanged or replaced by another since, as its name indicates, it is non-fungible.
Or in other words, non-fungible tokens are virtual assets that symbolize things in the real world: video games, art collections, music, documents, invoices, among many other alternatives that can be purchased online through cryptocurrencies and that contain a unique code.
These digital assets or goods are based on blockchain technology in order to be legal and traded. The Blockchain is (in simple terms) a large database that collects and stores information in a decentralized manner, thus creating a single record that cannot be tampered with. In other words, it is a technology based on a chain of blocks with a public and distributed database in which the transactions that are carried out on the network are safely recorded.
One of the attractions of the NFT's is that, being based on the blockchain, they maintain the premise that they cannot be falsified or reproduced by third parties, which means that, in theory, you would have a unique "piece" of its kind when acquiring a NFT and hence its high costs.
What are NFTs for?
Taking into account that an NFT can be any digital asset, non-exchangeable and developed on the blockchain, your imagination will set the limits to its usefulness. That is, an NFT can be a design, an art but it can also be a contract, a property registry, a copyright document, etc. NFT's can only be sold, so if you want to buy one, you can and later you can sell it but not exchange it for another.
What is the rise of NFT's?
NFT's can be seen as a digital reserve of capital (a kind of savings) due to its ability to preserve value. Because they are not subject to inflation like traditional currencies are an alternative like cryptocurrencies. Certain NFT's offer a safe and stable investment option.
One of its main advantages is that they are assigned a kind of digital certificate of authenticity, a series of metadata that cannot be modified. In these metadata its authenticity is guaranteed, the starting value and all the acquisitions or transactions that have been made are recorded, as well as its author.
We hope that through this article you have been able to clearly and easily understand NFT's. However, from e·Saurio we want to advice you that this is a relatively new market and as such, details regarding people's financial security still need to be fine-tuned. We recommend thoroughly researching, analyzing and contemplating all possible scenarios before deciding to make a transaction of any kind. This article is merely informative.
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