What’s an NFT and how does it work

NFT is a type of digital token or asset.

Everytime you purchase an NFT, you’re shopping for the rights to that specific asset.

Non-fungible means that it can’t be changed at any time when it is created, you can’t split it up and it must be distinguishable from something else.

A token is a small piece of data that you just own.

So, an NFT is a token that you just own, that doesn’t change throughout time. Is a piece of data that is owned by an address, and whoever has the password to that address owns that piece of data.

An NFT will be purchased and sold to different addresses and that data is verified on a blockchain. You’ll be able to check the owner history, is always trackable.

It’s essential to know what you are buying.

Once you purchase an NFT, you might be buying a bit of data that points to a server that hosts that image.

It’s best to know that the server may change the image, it can change the particular piece of data that you simply own on the blockchain.

So, what you own, is just not the access to the server, and not the image itself, but somewhat that tiny piece of data that points to the server.

When you purchase an NFT, you’re shopping for a small piece of data that represents something larger. Kind of shopping for a stock: you’re not shopping for all the company, and unless it’s a dividend stock, you’re not getting anything from it.

Why would you want to purchase an NFT?

Right now the main reason most people are shopping for is that they see NFTs as collectibles.

Four predominant things make an NFT valuable:

These are the first NFTs, and there’s a chance they may improve in value. The First edition of something has often a high perceived value.

The utility is the second reason. Some NFT could possibly be used to take part in games, others may be staked, and soon there could be a lot of totally different makes use of, even for the real-life event.

An NFT is valuable if it’s distinctive or rare. It’s like having a painting. Anybody can have a copy of the well-known painting, however only one person, or a museum, can hold up the real painting. The copies have little to no value, while the original can cost millions.

Ownership history. Individuals purchase any kind of things that had been beforehand owned by celebrities. Why not NFTs?

Can someone copy your NFT?

On the finish of the article, I listed a few of the costliest NFTs. Does this imply that I copied it?

Somebody can copy an NFT just like another piece of artworkwork. But the unique NFT address may be traced back to the original creator since all NFTs have a log of their transaction history.

Transaction history can’t be erased because is written in the blockchain. The value in an NFT is not the image itself, but the specific piece of data.

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