NFT: what they are and why they are important in 2022
You keep hearing about NFT but still don’t understand what they are? Well this article is tailor-made for you.
Let’s start by looking at the name, it is in fact an acronym and more precisely it translates to Non Fungible Token i.e. Tokens that have no inherent functionality.
You may have heard a lot about Token, if so, it will be much easier for you to understand its substance.
What is a Token?
A token is a contract, a smart contract more precisely, a set of directives and functions that describe its behaviour, transcribed on a specific blockchain.
A token, however, is not just an agglomeration of functions, because it takes on the appearance of a brand, it is often used to identify a project, sometimes by actual companies that use the token to acquire funds.
The difference between a token and a cryptocurrency is very subtle; it is in fact possible to use a token as an exchange currency, like a cryptocurrency.
One can say that a Cryptocurrency (such as ETH,BNB,ADA,CRO) is the mother currency of the underlying Blockchain, while a Token is a fragment of that currency (such as CAKE,CRV).
It is safe to say that a Token depends on the health of the cryptocurrency and its underlying Blockchain.
Furthermore, a Token can perform many functions, including payment, governance, voting or fundraising.
But then what is an NFT for?
The question is fair enough, you may be wondering what is the point of a token that ‘doesn’t work’?
It is correct to say that an NFT does not perform any function, but it is still an indelible transcript on a decentralised database (Blockchain).
So it must be said, an NFT is not programmed to perform any directive, but the human being has found a way to use it anyway!
In fact, a Non-Fungible Token can be a graphic representation of an object, a drawing, a video, an audio.
More precisely, it can represent the certification of possession of a specific digital asset.
Is an NFT a work of art?
The answer is no!
An NFT is not the design itself, but only the certification of ownership of a particular design.
It can therefore be said to be an advanced system for the digital notarisation of assets.
There may be NFTs that uniquely identify a particular digital asset, or collections, a finite and defined number of copies of the same asset.
It goes without saying that if we associate a token with the possession of a painting, this token can take on an even considerable value.
What can I do with a Non-Fungible Token?
You can keep it in your wallet like any other token, as a souvenir, or waiting for its value to appreciate.
Or you can give it as a gift to someone, then send it to another cryptocurrency wallet, perhaps in exchange for money.
From these practices, new needs gradually arose, hence the creation of the first marketplaces where one could offer one’s tokens for sale or auction, such as OpenSea.
Marketplaces are actual market website where one can sell or buy the most varied types of tokens.
Visiting these marketplaces you will find the fair of everything and the opposite of everything, often rubbish, sometimes real artists.
What other roles could NFTs play?
It is a whole new world, a blockchain technology that has just been born. Like the very first internet networks where you connected with the UsRobotics 28k modem and via BBSs you reached a new world of global information.
This is the WEB3, where information is not only global but also distributed, decentralised, indelible and organised.
It is in this world that the Metaverse is born, a universe consisting of Meta Data and virtual structures, hence digital assets in infinite quantities.
It goes without saying that the next boom will be the race to buy NFTs in order to own assets in the Metaverse.
We at Made are always attentive to these changes and are available to support you. If you would like to learn more about this topic, please do not hesitate to contact us.