NFT! How It Works! The Advantages And Disadvantages Of NFT

NFT!!! Non Fungible Tokens. It sounds weird, doesn’t it? No matter. Here I am.

Today I will discuss this NFT with you in detail. We hope you find this article useful for those interested in working with NFT or investing here.

So let’s read out what I’m going to discuss today.

What is NFT?

NFT stands for Non-fungible Token. That is a token that is not fungible. Let me make it easier.

To understand clearly you must first understand what Fungible Tokens are!

We attempt to comprehend the subject by using a simple example.

Suppose you went to the store to buy 1 kg of flour. The shopkeeper now told you that 2 dollars per kilogram of flour. You asked the shopkeeper to give you 1 kg of flour and gave him 10 dollars. You were given one kilogram of flour and eight dollars by the shopkeeper.

Read: 10 Popular Types of Cryptocurrency You Should Know About

Now, the shopkeeper can give you four notes of two dollars or a note of five dollars plus two dollars, and a note of one dollar if he wants.

You might not be concerned about whether the shopkeeper gives you back $8 in four 2 dollars notes or 5 + 2 + 1 dollar notes. Because it really doesn’t matter.

The value of 4x 2 dollar bills is the same as the value of 5,2, and 1 dollar bills.

This is referred to as Fungibility in economic terms. That means you can replace 4×2 dollar bills and 5 + 2 + 1 dollar bills one at a time if you want. These two are interchangeable.

On the other hand, suppose I have a copy of William Shakespeare Sir’s first book, which was published by another publisher for the first time.

Do you think I’d agree if you came to me and said, “Brother, I’m giving you money to buy another copy of that book by William Shakespeare Sir from another publication; a brand new shiny copy?”

Absolutely not.

Regardless of how much dust and sand is in the book, it is the first copy of William Shakespeare Sir’s book published by another publication; it has historical value in addition to its own value.

Although the text of this book is identical to the books now being published by other publishers. But I have a different opinion.

The fact that you are unable to collect the book from me, even at the same price, is referred to as Non-Fungibility.

So, They cannot be replaced by one another. Each of these carries a unique value. 

I hope you understand the difference between fungibility and non-fungibility. Now we must comprehend the Token fact.

Suppose I decided to sell one of my sound speakers. That is how it works. At the same time, I photographed the sound speaker and posted them on Facebook Marketplace. Someone came to my house and bought it after seeing it on Facebook.

Now that I’ve sold my sound speaker, it’s likely that only I, my family members, and the person to whom I handed it over are aware of the problem. No one except us knew the fact. Maybe two or three more people would be aware of it if there were a car or a house there instead of a sound speaker.

The documents we are dealing with when we give something to someone are, in fact, referred to in digital jargon as tokens.

You can easily transfer everything you own, starting with this document, from one person to another using virtual world tokens.

The biggest benefit is that while it is extremely secure on the one hand, the owner of the item changes in just one minute, so there is no need to worry too much.

NFT meaning in blockchain terminology:

NFT is a token that represents ownership of the digital item. 

You can authorize items ( art, music, doodles even real estate ) as your unique property which will be protected by the Ethereum blockchain. No one can claim your property.

I hope you get it well. If you have further confusion leave a message.

How are NFTs work?

Understanding how NFT operates requires a little more effort. Have a look at the below illustration, it will be much simpler to understand.

Let’s say you are a skilled illustrator or graphic designer. You now intend to launch the NFT of one of your artworks.

In that case, you must actually complete the task in a number of steps. Although the tasks are straightforward, the process is quite straightforward.

The first requirement is having Ethereum Coin.

Read: Know about Etherum and others cryptocurrencies

You must mint that image using that Ethereum Coin, which is the second requirement.

The third requirement is that you must attach a coin to the minted image (which is essentially under the control of the blockchain) so that it can be easily transferred through that coin or token when you give it to someone.

NFT, or Non Fungible Tokens, function in this way.

Everything has some advantages and a few disadvantages. NFT is no different. NFT also has some benefits and drawbacks. The list of them is below.

 

Advantages of NFT

1. Many largest companies in the world are already considering NFT, Blockchain, and Ethereum. So if you have any interest in working with blockchain development or data science, begin doing so asap.
2. The copyright issue raised by NFT has grown significantly more serious. This effectively prevents you from carrying any artwork in your own name going forward. Technology has made it impossible for some evil people to continue to steal other people’s ideas and pass them off as their own without giving them credit. You might be able to copy something, but you cannot claim ownership of it.

Disadvantages of NFT

 

Concerning the NFT issue, nothing can be said with certainty. You cannot predict with certainty whether the value of an NFT you purchase will rise or fall over time. With everything, there is uncertainty.

 

NFT investment: Is it good or bad?

We always want to be rich quickly with less effort. As a result, a lot of people view NFT as an investment with a very high rate of return and may rush to purchase it by mortgaging their property, home, or vehicle.

But no !!!

Don’t overlook doing that.

I think you should study NFT as much as you can right away and try to learn everything you can about it. Learn more about this subject, and if you believe you have made an investment that will pay off in the long run, you may want to give it a try. However, bear in mind that running a business can result in both profit and loss.

It is preferable if you can market one of NFT’s services as a freelancer. For instance, Blockchain Development and NFT Marketing are both issues because of the rising demand in the markets.

NFT is all of that. I hope it’s helpful.

Let me know what this post sounds like. Don’t forget to share it on social media if you like it.