What is an NFT?

by Breakout Team
May 27, 2022
what is an NFT

An NFT (non–fungible token) is a unique token that cannot be altered. Non-fungible means something that cannot be interchanged. NFT defines a unique token or signature that is stored in a digital form on blockchain-based ledgers.

Digital content like images, music files, a physical item or content posted on the internet or even something like a Tweet can be converted into an NFT. Any digital asset, if it is transferable, can become an NFT.

NFTs work like an invisible watermark that is engraved on a physical object. It makes sure that the thing remains non-fungible or unique for the holder. Real currency or digital coins are considered as fungible items, as you can change them with another note or a virtual currency and that will still hold the same value in your wallet.

But, Mickey Mantle rookie season baseball trading card is a non-fungible asset. As you cannot trade it to a different card that holds the same value for you.

Notably, it also provides protection for the real owner for their assets, whether that asset is digital or physical. Each will have an encrypted digital identifier to prevent unlawful reproduction or unauthorized distribution of the asset. NFTs give owners of unique works a sure way to maintain and hold complete ownership of their digital goods.

Two clear examples put the concept in clear focus:

A musical track created by a music composer: usage of an NFT will make the soundtrack permanently identifiable as an original artwork of that artist. For the purpose of royalties and usage fees, this protects artists from getting their work stolen or used for business purposes without their permission or commission.

Images: if you have ever used an image from a stock photography site, you know that it comes with a price or you will need to give a link to that site as an acknowledgement. NFTs will help the owner to directly hold the copyright of their artwork and the blockchain will hold the entire transaction on it to show who owns the image.

The value of an NFT

NFTs can be traded just like Pokemon or baseball cards within the community. The authenticity is never an issue for NFTs as they are always going to have their digital identity engraved on a blockchain-based digital ledger. Like any other collectible item, NFT does not guarantee an appreciation on your invested value. It merely makes sure that the token is genuine and you hold it.

There has been a tonne of media coverage about NFTs and it’s real value. One of the many stories, a guy named Justin Sun bought an NFT of a rock at a price tag of half million dollars.

https://twitter.com/justinsuntron/status/1429346110405890048?s=20&t=24QK0qAprbcLxHEYj0Mdrg

There are tons of stories available online where people bought NFTs with their crypto holdings instead of encashing them into real money.

How does an NFT have actual cash value?

Yes, NFTs could hold actual value in cash. On whatever system the NFT gets minted will also hold the value of the asset when it was created and the last transaction price of the same. And those tokens can be converted into real money at the exchange price or in case of land registration, it can have its price engraved in real currency only.

If you want to buy, sell or mint your NFTs online, you can simply use NFT marketplace or technical methods to do so.

Here are some of the famous NFT marketplace  platforms to use:

  • OpenSeas
  • Axie Marketplace
  • CryptoPunks
  • NBA Top Shot Marketplace
  • Rarible
  • SuperRare
  • KnownOrigin
  • Foundation
  • MakersPlace
  • Nifty Gateway

You can checkout each marketplace to find the right NFT for you and start trading.

This all seems really complicated, though the concept is simple – holding the value and ownership record on a blockchain-based digital ledger.

If you want to learn more about NFTs, Crypto and Blockchain technology, join the live audio rooms on Breakout Audio Application.

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