How Non-Fungible Tokens Work: NFTs Explained

In the digital era, each and every day we share numerous images, infographics, gifs, memes, artworks and other digital assets with our friends and family for a variety of reasons. But have you ever wondered, who created those assets or where those digital properties originated from? This is where non-fungible tokens (NFTs) come in. These tokens are as exclusive as unique pieces of art.

 

What is an NFT?

Non-fungible tokens or simply NFTs, are digital assets or a type of digital certificate that may be used to prove ownership of anything that has a store of value. NFTs cannot be replicated or equated with any other asset since each non-fungible token asset is unique in its own right.

Interesting thing is that even if you generate 1,000 copies of the same digital artwork, each copy will be distinct from the other 999 because each NFT token carries metadata, a particular sort of information that is unique for each token.

How do NFTs Work?

A non-fungible token may be viewed as blockchain-verified evidence of ownership of a certain item. NFT ownership is recorded on the blockchain, which functions as an electronic ledger. By solving complex arithmetic problems, computers verify every transaction happening on the blockchain. NFT ownership may be confirmed and traced by anybody in the world, but the person or organization that holds the token can remain anonymous.

Since NFTs made their debut, they primarily have been created and held on the Ethereum blockchain. The Ethereum blockchain is a platform for both NFT and cryptocurrency creation and minting.

You may create an NFT that is entirely digital. A picture, GIF, video, or audio recording are all acceptable formats. NFTs can also be used to represent real-world things, such as cards or shoes, in the virtual world. The physical and digital versions of these NFTs can be purchased separately or as a bundle.

It is possible for an NFT’s inventor to collect a royalty every time their invention is sold. As a result, digital artists will be able to earn money from their work every time their work is purchased. Royalty payments are not common nowadays in the traditional art industry.

NFTs vs Cryptocurrencies

Nowadays cryptocurrencies can be used to make payments. Cryptography is used to protect the digital currencies. Some people even think that cryptocurrencies will eventually replace traditional currencies that exist in the modern world.

Although NFTs are encrypted, they are not utilized as currency. The fact that both NFTs and cryptocurrencies are based on blockchains is a key commonality between the two.

Cryptocurrencies are simply tokens that are similar to each other, making them effectively fungible. When it comes to cryptocurrencies, one bitcoin is equal to another and they are suitable for commercial transactions because of their anonymity. NFTs, on the other hand, can only be found as a single unit and cannot be divided.

 

Why Are People Investing in NFTs

NFT’s are emerging right here and right now and it is obvious that as technology continues to develop, we become more and more reliant on it. It is probable that NFTs are going to be a massive asset category in the future of the virtual economy.

NFT’s are impossible to replicate, which eliminates the risks of art fraud, losses from which have been approximately 8 billion dollars annually.  In NFT world, there is no need to go to art shows, galleries, or exhibits to display/sell artwork, the process is getting much more simple and profitable for both – buyers and sellers. And at last, think about Gen Z. Younger millennials nowadays don’t hold artworks at home, and do not ever plan to do so. Pictures, finances, and contacts are all stored on your phone, as we are becoming more and more digitalized.

Maggie Oniani – Designer From Webiz Community, Recently Created Her First NFT Collection

Maggie is a Webiz Community-based illustrator, graphic designer, and motion designer. She’s a huge fan of all art-related things, therefore she recently became interested in NFTs.

The events that are taking place in Ukraine during recent months have been very sensitive for all of us. These events always reflect the creativity of artists as they express feelings, protest and support through their artworks. That is exactly what happened in Maggie’s case. The NFT collection was created on the theme of Ukraine and was intended to show support to the Ukrainian people.  It is also important to mention that all the characters in this collection are hand-drawn from the beginning to the end, giving uniqueness to each of them.

Currently, Maggie is already working on a new NFT collection with new themes and ideas. At Webiz, we always support our community members interests and celebrate their success, we do believe that everything is ahead and soon Maggie’s NFT collections will become popular not only in Georgia, but throughout the world.

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