NFT: What it is, meaning and how it works

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Antonello Chicarello
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What is the common denominator between a work of art that sold for $69 million and the first tweet by Jack Dorsey, CEO of Twitter, which sold for $2.9 million? Both are gods NFT. But what does NFT mean? It’s basically a file Non-Fungible Code (“non-replaceable numeric code” in Italian). If you want to know What are NFTs And how they work keep reading our article.

What are NFTs?

There are two types of tokens in the cryptocurrency world: exchangeable and non-fungible.

  • Indecipherable codeThis includes units that can be exchanged, such as currencies. For example, if you exchange a $2 bill for two dollar bills, the value remains the same. However, anything that is not replaceable cannot be transferred, and its unique properties prevent it from being replaced by anything else (BBC News).
  • Non-replaceable code: NFT is a unit of data in a digital ledger, called a blockchain. These transitions are organized as individual records (blocks), linked together into a single list (string). Basically, the blockchain resists modifying its data. Once registered, the data in a particular block cannot be modified retroactively without changing all subsequent blocks. (Wikipedia). As such, each NFT can represent a unique and immutable digital object. So an NFT can be any digital file such as art, audio, video, GIFs, items in video games, and other forms of creative work (such as tweets).

Examples of NFT

One of the most recent examples of NFT is the first tweet from the Twitter CEO Jack Dorsey.

The Nyan Cat GIF was also sold as an NFT for $531,000. Finally, another example of NFT art is Every day: the first 5,000 daysIt sold for $69 million. This is a JPEG image created by the artist known as Beeple. The image consists of a collage of 5000 images.

How do you sell NFT?

Basically, any digital asset can be sold as an NFT.

Why buy NFT artwork?

Buy NFT work proves Ownership of the original part. This is true for every NFT, and although you can copy the piece, it will never be original. By putting the sale of NFTs in the context of physical paintings, anyone could buy a copy of the Mona Lisa, but only one person would be able to say Own the original artwork. This is the same principle for NFTs: Everyone can download a Nyan Cat GIF, but only one person can be the original employer.

Where to buy NFT?

Like physical artwork, NFT trades in virtual galleries that specialize in this type of content. The most important are OpenSea, which aggregates sales of other platforms, and Enterprise, a platform focused on the visual arts. On these sites, it is possible to bid and win NFT business.

What is the value of NFTs?

NFTs have no true intrinsic value. Its value depends on What is the amount the buyer is willing to pay. If someone decided to pay $2.9 million for the first tweet in history, it would be just his prerogative. The trend of NFTs is constantly increasing and it will be interesting to understand how the latter will evolve in the coming months and years.

What are the benefits of NFT for artists?

NFT one investment method Which (likely) will generate significant returns for investors. It can also be a great alternative for the artists themselves. In this period, marked by a pandemic that has affected concerts and other cultural activities, the option for NFTs may be more attractive. Finally, in addition to the value obtained from the initial sale, NFTs can guarantee their creators’ future (long-term) profits, for example with percentages of future sales.

Photo: © Unsplash.

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