NFTs are a new thing which have recently started gaining a lot of traction.

Recently you must have heard about founder of twitter “Jack Dorsey” selling his first tweet for $2.9 milion. Many people are selling their digital art using NFTs. A JPG file was sold for $69 million as NFT (shown below).

In this blog post, we will try to understand what exactly NFTs are and what can be done using them?

NFT Meaning and its Working

NFT stands for Non-Fungible Token. Like cryptocurrency is an implementation of blockchain similarly NFT is another kind of implementation of blockchain.

If you don’t know what a blockchain is then I would suggest you to read my other blog post in which I have explained about Blockchain in very simple terms.

The benefit of this implementation is that people can sell “one of a kind” things using it. One of a kind means those things which are unique. For eg: Monalisa painting created by leonardo da vinci is one of a kind. You can copy it or click its picture to duplicate it but still there will only be one Monalisa painting which exists ever. So, to decide the ownership of such “one of a kind” things NFT is created. That means, a token is assigned (certification of ownership) to a “one of a kind” thing. Whoever has that token will be the owner of that thing. This thing can be a song, a painting, picture, tweet etc. This token is stored in a blockchain ledger. Hence, it’s a token which is non-fungible (i.e. non duplicatable).

This cat meme shown above was sold for $500,000. Amazing things are happening in the world of NFT. But we don’t know yet the future of NFTs. But this is definitely an interesting implementation of blockchain.

Benefits of NFTs

Peer to peer transaction is biggest benefit of NFTs. This means that the transfer of ownership certificate (token) between two people can happen without involvement of any middle person. This is similar to what happens in case of cryptocurrency. Ledger keeps the record about the real owner of token. This is basic concept of blockchain. Currently NFTs are part of Etherium blockchain. But planning is going on where NFTs will be moved to a different blockchain. NFTs were created so that people can do a kind of barter system without involvement of any middle person.

Future of NFTs

This is certainly an interesting implementation of NFTs. But at this stage we don’t know if its a bubble/Fad or will the usage of NFTs become mainstream in future. Only time will tell this.

I hope you have gotten an idea about what NFTs are.

If you like reading my posts consider subscribing to my newsletter in which you will get all the latest blog posts and updates related to more such latest technological trends.