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Wtf*** are NFTs?

NFT stands for "Non-Fungible Token" and describes a non-exchangeable value. An NFT stands in contrast to exchangeable values, such as a currency. Each NFT is therefore unique and cannot be replaced by another object.

A picture, for example, can be viewed online, copied and saved. However, an NFT gives the purchaser something that cannot be copied. The OWNERSHIP of a work. You can think of NFTs like collectibles. Like paintings, stamps, comics - only in digital form. Digital NFTs are visually indistinguishable from their copies. Only an underlying encryption on the blockchain guarantees that it is THE original. An NFT is therefore only valuable because others assign it an imaginary value.

NFTs are part of the Ethereum blockchain. This is the basic framework for the cryptocurrency "Ether", the second most valuable in the world after Bitcoin. Meanwhile, there are other blockchains that have introduced NFTs, such as Cartano. However, the Ethereum network is still the largest NFT platform. So NFTs are a type of cryptocurrency. Unlike Bitcoin, Ether and others, however, they are unique. They have a kind of digital signature - similar to the signature of a great painter. This means that the original can always be recognized as the original, even if there are countless similar copies of it.

The blockchain is comparable to the accounting of an account. However, the blockchain exists purely digitally. It is a secure means of tracking the sale of digital objects. Unlike an account book, NFTs are stored as a string of numbers and letters. Information about the owner or holder of an NFT, as well as the date of sale and to whom it was sold, is stored in this virtual certificate. With the purchase, one's transaction of money spent on an NFT is added to the list of previous transactions. Storing this data in the blockchain guarantees the authenticity and uniqueness of the NFT.

This solves a problem that creative people in particular often have on the Internet. It allows them to ensure that their works are not simply copied on the Internet. By creating a unique original, its value increases. There can only ever be one original of each NFT that is also authentic. So the goal is to create an artificial scarcity. There may be countless copies of a picture or a video or a song, but only one person can actually own the original. In addition, the creator of an NFT can also stipulate that whenever the token is resold, a certain amount is paid to him or her. :)

Thanks to NFTs, creators can now offer things even there was no sales platform before. In principle, NFTs can be anything that can be stored digitally. At the moment, however, it is mostly a form of digital art.

And, of course, it has something to do with the financial world. Just like on the art market, you can buy an NFT and speculate that the value will rise. Whether owning a unique NFT alone makes it valuable... that's debatable. Even if a buyer owns the original, genuine NFT, other people can copy the NFT and share it online.



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