What are NFTs? Everything You Need To Know

If you haven’t heard about NFTs, then you probably live under a rock. Considering these new tech gimmicks are everywhere on the internet. You can’t go from one place to the next without some celebrity or influencer talking about them. But what are NFTs?

NFT is a Non-Fungible Token, part of individuals’ digital assets like Bitcoin and other cryptocurrencies. What sets NFTs apart is the media attention they are getting from collectors and influencers online. Everyone and their pet have their own NFT.

Let us dive into these digital tokens and what they mean for the future.

What are NFTs?

NFT stands for Non-Fungible Token, created as a sense of digital art format. The technology for the making of NFT is similar to that of cryptocurrency. It is mostly based on blockchain technology.

What sets NFTs apart from other forms of cryptocurrency assets, like Bitcoin, Ethereum, etc., is the ‘fungible’ part. NFTs can’t be exchanged or traded.

Every NFT is unique and singular and no two are alike. You cannot make copies or replicas of individual NFTs, nor can you exchange them online. Kind of like an original painting. Sure art can be copied or replicated, but the original is still the same and most valuable.

Compared to that, fungible assets like cryptocurrency or physical shares can be interchanged. Hence why NFTs are called non-fungible tokens.

How do NFTs work?

NFT is an online asset that has a unique digital token attached to them. Once you buy an NFT online, you are given a token, showing that you own the asset. NFTs are pitched as digital collectibles. These collectible items can be anything from artwork, music, domain names, games, etc. With sole rights of the property belonging to the person who owns them.

The NFT can’t be forged and manipulated. And the owner of the individual NFT will have proof of ownership.

Once an NFT is bought or sold, a digital record is created on a blockchain. With verification and validation of ownership fully cataloged.

The biggest examples of NFTs these days are:

1. Digital art content

2. In-Game items and collectibles

3. Domain Names

4. Digital Tickets or Coupons

5. Essays

The creators of these digital assets earn exorbitant amounts by selling their art online with millions of viewers worldwide cashing in to earn the rights for their own NFT.

In 2020 alone, the sales for NFTs were $250 million, proving just how much worth this new digital currency scheme really is.

What is the adverse effect of NFT?

Once the NFT scheme had fully launched online, many people quickly jumped on the bandwagon. Millions were earned as a result of selling these individual assets, and artists around the world received a lot of clout for their work.

But just like how harmful cryptocurrency is to the environment, the same can be said for NFT.

Not only do they generate a massive amount of CO2 emission, but they also leave a huge carbon footprint that is equivalent to entire countries’ worth of carbon footprint.

With every sale of an NFT prompts about 211kg of CO2. With such daunting numbers, this new technology has what it takes to really mess up the environment.

The staggering amount of revenue generated from the sale of these NFTs aside, the logistic of ‘owning’ your own digital artwork is ridiculous too. Considering digital copies of the original can be made, there is very little to prove the difference between the two. Sure one might come with its own unique token. But if it looks the same, what makes it unique?

At MERNsol, clients work with us for our expertise, but they love us for our accessibility. We create a mix of our creativity and drive for innovation to set a path for our customer’s growth throughout all aspects of their business.

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