What Is NFT?

What Is NFT?

Non-Fungible Token or NFT is a digital asset based on blockchain technology that is currently popular in the crypto world because its value can reach tens of millions of US dollars. most NFTs use ether (ETH), the coin created by Ethereum.


What are Non-Fungible Tokens (NFT)?

To understand NFT, we first need to look at the two keywords in its name, Non-fungible which comes from the words Fungibility and Token.

Functionality is the ability of an asset to be exchanged or replaced with similar assets that have the same value. For example, you can exchange Rp 10,000 banknotes for two Rp. 5,000 notes and the value remains the same.

Meanwhile, tokens are digital assets that represent goods, services or other forms of value.

So, a Non-Fungible Token (NFT) is a digital asset that represents a valuable item with a value that cannot be replaced or exchanged. Each NFT has transaction log data in the blockchain. This data contains the creator, price, and ownership history.

How is NFT different from Other Crypto Assets?

In essence, an NFT is an asset that evolves from cryptocurrency. However, it has a different purpose, form, and use from crypto assets like Bitcoin, for example. Each NFT is only created once and it cannot be exchanged or traded with other NFTs because their value is not commensurate.

The unique NFT data works like a fingerprint which makes it easy for the system to verify ownership. The owner or creator may also store certain information in it. For example, creators can attach a signature to their artwork by including it in the NFT metadata.

In addition, NFT ownership is absolute, meaning that whoever owns it has full ownership rights. The copyright to reproduce the work remains with the author, but the owner is the only one who owns the original work.

Why is NFT So Popular?

NFT actually became popular in 2017, when the first NFT game was launched, namely CryptoKitties. CryptoKitties itself is an Ethereum blockchain based game that allows players to adopt, raise and trade virtual cats. The NFT market is experiencing rapid development starting at the end of January 2021.

For enthusiasts and users, NFT represents a new era of digital collection. It’s a new way to support artists, athletes and musicians without going through a third-party intermediary. For creators, artists and musicians, NFT allows them to profit directly from their work as there are no cuts from third parties such as record companies, distributors, publishers and others.

The popularity of NFT is still very limited to the arts, hobbies, and entertainment industries. However, many observers of the crypto world see the great potential of NFT applications in many sectors.

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