NFT's: The Untapped Phenomenon

What is an NFT? Non fungible tokens explained!

Cryptocurrency, which includes bitcoin, is one of Blockchain's implementations that have gained traction and similarly NFTs are its next implementation which is based on cryptocurrency dealings. NFTs come with the advantage of being able to purchase and sell unique and expensive items which are rare, and one-of-a-kind. Putting it simply, the concept of NFTs and the way they are exchanged is pretty straightforward and they are unique to the concept of the ever-growing metaverse. 

How do NFTs work?

Let's say I have a piece of artwork, and I assign a token to it. This turns the token into a certificate of ownership which indicates that whoever owns it is the legitimate owner of the property. It might be any kind of 'property’ such as a song, a signature, artwork, or even a painting that has been created using MS Paint. This token is now kept in the Blockchain ledger and Blockchain technology acts in a decentralized manner to store it. It may have various copies which can be viewed on multiple computers all over the world but this assigned token indicates who truly owns the piece. 

NFTs VS Cryptocurrency: What’s the difference?

A major advantage of NFTs is that it makes peer-to-peer transactions possible which essentially means that the ownership certificate can be transferred from one person to another. So, in a nutshell, the way that it is exchanged is quite similar to cryptocurrency with the only difference being that the amount of cryptocurrency held by each account is listed in a ledger. Meanwhile, the owner of the token and the person linked with the NFT would be listed in the aforementioned ledger as well as to the token which was allocated.

What drives it to thrive?

We used to have a server that acts as the middleman to make a deal on the previous version of the web, but that is no longer the case. People can now trade NFTs directly with one another using cryptocurrency. It is currently a component of Ethereum, but a separate Blockchain for NFT is being developed and will be accessible shortly.

NFT and its impact on nature

NFTs and their cryptocurrency counterparts use a lot of energy which has a negative impact on the environment. Bitcoin 'mining' already emits 38 million tonnes of CO2 per year which is more than Slovakia's carbon footprint. For example, let us consider the way Ethereum is mined as a cryptocurrency; it uses a tremendous amount of energy. This produces a significant amount of carbon emissions and has a significant carbon footprint which is something we must consider and try to change going ahead.

Facts about NFTs

Here are some interesting snippets about NFTs:

• In 2021, a digital artist named Beeple Crap had his work auctioned for $69 million.
• In 2011, someone bought an old cat meme for $0.5 million.
• "CryptoPunk 7804," was sold for around $7.6 million.

Conclusion

Many individuals believe that NFTs are a great tactic to invest in but it is too early in my opinion. Having said that, buying or selling NFTs is exciting and it is something that you should experience once in your lifetime. It's a one-of-a-kind technology that is present in a whole new world which is digital! Blockchain will revolutionize the world in the future because we now have a method by which we can preserve authenticity and ownership without any dispute. Imagine a future where there will never be a disagreement over a house or property because technology now allows you to define a hundred percent ownership for the rest of your life and that is just what NFTs offer!