What is an NFT and the way does it work

What is an NFT and the way does it work

NFT is a type of digital token or asset.

Everytime you purchase an NFT, you are shopping for the rights to that particular asset.

Non-fungible means that it can’t be modified every time it is created, you can’t split it up and it should be distinguishable from something else.

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

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

An NFT can be bought 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 vital to know what you’re buying.

Whenever you purchase an NFT, you’re shopping for a chunk of data that factors to a server that hosts that image.

You should know that the server might change the image, it can change the specific piece of data that you own on the blockchain.

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

If 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 buying your entire 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 individuals are buying is that they see NFTs as collectibles.

Four foremost things make an NFT valuable:

These are the primary 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 might be used to take part in games, others may be staked, and soon there could be a whole lot of completely different uses, even for the real-life event.

An NFT is valuable if it’s unique or rare. It’s like having a painting. Anyone can have a duplicate of the famous painting, but only one individual, or a museum, can cling up the real painting. The copies have little to no value, while the unique can cost millions.

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

Can somebody copy your NFT?

At the end of the article, I listed among the most expensive NFTs. Does this mean that I copied it?

Somebody can copy an NFT just like another piece of artwork. But the authentic NFT address will 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 worth in an NFT isn’t the image itself, however the specific piece of data.

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