A beginner’s guide to What is NFT or Non-Fungible Tokens?
Art and music are the early adaptors of NFT and the rest are soon to follow
An NFT or Non-Fungible Token is a unit of data, stored on a type of digital ledger called a blockchain, which can be sold and traded. The NFT is used to identify a particular digital or physical asset (such as a file or a physical object) and a license to use the asset for a definite purpose and period.NFT could be traded and sold on digital markets, though right now this is an extralegal activity.
Difference between NFT and Cryptocurrency
NFTs are cryptographic tokens, but not mutually interchangeable like cryptocurrencies such as Bitcoin or Ethereum. In simple words, if you trade in cryptocurrencies you get the same value in other cryptocurrencies but trading in NFT gives you something completely different. Think of it as, trading a piece of art for a music album.NFTs are not mutually interchangeable, and so are not fungible.
How does NFT WORK?
Essentially all NFTs are part of the Ethereum blockchain which is a cryptocurrency like others. But the Ethereum blockchain is specially programmed to support NFTs. They store extra bits of information to accept NFTs and behave differently than a crypto coin. Soon other blockchains would follow suit and in near future, there would be multiple blockchains supporting NFTs.
Applications of NFT
Other than Digital Art and Music NFT could also be used for the following purposes
1. Ensuring the Authenticity of Products
2. Real Estate, for landlords, proof of ownership, contracts, timestamps
3. Intellectual Property and Patents
4. Health Records, Medical history, and Identity Verification
5. Academic Certificates and Credentials
6. Supply Chain management
7. Gaming Industry for brand collaborations
9. Artwork Tracking
10. Voting: Identification and unique ballot systems