Non- fungible tokens are those token that is available on a digital platform, unlike the physical one. They are unique in their existence because they have got some unexceptional attributes in them which makes them irreplaceable.
Fungible means something replaceable, hence non-fungible means something that cannot be replaced. They don’t exist in a physical world. They exist in form of an art or GIF etc. and the mechanism through which these arts are sold is called ‘Non-Fungible Tokens’.
In the physical world, the mechanism that works is an auction and people do bid and the highest bidder gets the auctioned goods. In an online auction, the art is also an online one and the bidder doesn't get the physical copy of it. NFT enables you to know the original owner of the painting or the present owner of the painting.
The other superb thing that it provides is royalty, if you choose the option of royalty, the art as many times it is sold further, you get the specific amount of royalty that you have chosen.
Say if you choose the twenty per cent royalty for your art you can earn twenty per cent every time it is sold to someone else ahead. If you want to earn passive income through bitcoin, then you must read guide for bitcoin trading before move forward.
WORKING OF THE NFT’s?
NFT works through the mechanism called Blockchain Technology and particularly Ethereum blockchain technology. Any type of entry done will be available on this as it cannot be erased. The person who buys the art his entry is uploaded in the ledger, and any further selling that is done is also made on this public ledger.
Certain arts can be bought through cryptocurrencies. Because it is built on blockchain technology and specifically the Ethereum blockchain which allows others to use its blockchain is one of the most important benefits because Ethereum’s popularity is known to everyone.
NFT AND CRYPTOCURRENCY
NFT has its origin in cryptocurrency because cryptocurrency has brought the digital wave into this world. One of the bases NFT has in cryptocurrency is blockchain technology. Blockchain technology enables many perks for its users.
It provides a decentralized system of transaction which keeps all the data inside a ledger that is publicly available to anyone across the world. This system promotes transparency. In NFT also any type of art, music or game etc. That is sold digitally keeps track of the owner who belongs to that property, the amount for which it is sold, the time and place for that transaction.
It further keeps track of the further selling of that specific thing and the information related to it. All this is possible through this technology.
As NFT’s are non-fungible their value is not stagnant and it can be more or less per selling. Many new crypto platforms have enabled NFT in their crypto marketplace.
The recent one is WazirX that has become India’s first crypto platform to have enabled this on its platform. Many countries have already enabled this feature in their respective crypto platforms.
WHAT ELSE IT HAS TO OFFER?
- STANDARDIZATION concerning ERC-721 ERC-998 ERC-1155
- TRADE ABILITY
Hence we can conclude that NFT lies its origin in crypto because the blockchain technology that has come into constant use after the cryptocurrency is instrumental in the existence of these non-fungible tokens.
Blockchain technology is trusted because it offers many things in this modern world as to what people are looking for. I hope this article proved beneficial, in terms of how cryptocurrency has led to the origin of so many things digitally that no one had ever thought including NFT’s.