What Is An NFT?
Contrary to popular belief, NFTs are not jpg images selling for millions of dollars online. Non Fungible Tokens, also known as NFTs, are tokens (a small piece of data that you own) that represent the right to an asset. Non-fungible means that it can’t be changed once it has been created, and it must be distinguishable and unique. Assets like bitcoin are fungible, meaning that all bitcoins are the same and are interchangeable. On the other hand, something like the Mona Lisa is Non-fungible as it is a one-of-one.
Essentially, an NFT is a piece of data that belongs to an address (a wallet), and whoever has access to that address owns that piece of data. This piece of data is verified on a blockchain and can be bought and sold to different addresses. Now, this piece of data does not actually represent the images that we have come to associate with NFTs, but rather a link (like a URL) that points to a server that hosts the image, and whoever owns the server owns the image. So, when you buy an NFT you are buying a piece of data that links to an image or GIF hosted on a server, which can be manipulated or changed by whoever owns the server. In other words, you are buying a piece of data that represents something larger.
A popular misconception is that NFTs can be copied and pasted, and thus there is no point in paying for them. While it is true that any image residing on the internet can be copied, the copied image does not carry with it the actual NFT — the token that links to the original asset and verifies its uniqueness. We can relate this concept to physical art in the sense that any painting can be replicated in precise detail, however, it is only the original that is valuable. The beautiful thing about NFTs is that they make it significantly easier to verify original digital assets from copies because the entire history of an asset’s creation and transaction details are stored on a blockchain for all to see. In contrast, it often requires highly skilled, trained art professionals to distinguish between an original piece of physical art and a copy.
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Continue reading here: NFTs — Not What You Think
