NFT project is a development line focused on creating cryptographic assets on a blockchain. The assets are called non-fungible tokens or NFTs and have unique identification codes and metadata. In combination with smart contracts, art created in this manner has a unique value assigned to the highest bidder. This approach allows maintaining the uniqueness in the digital space and protecting the original work of art.
NFT vs Crypto
NFTs are generally built using the same way as well-known cryptocurrencies like Bitcoin or Ethereum, but that’s where the similarity ends.
Crypto is “fungible,” meaning it can be traded or exchanged for one another, for example, 1 BTC coin is always equal to another BTC coin. That is why crypto’s fungibility makes it a trusted means of payment conducted as a transaction on the blockchain.
Considering NFTs, each one has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). How it works The habitat for NFTs is blockchain technology, mostly Ethereum, but other blockchains support them as well. Non-fungible tokens are “minted” from digital objects that represent both tangible and intangible items. They can represent all kinds of art like paintings, videos, music, texts, etc.
Instead of a physical item, the buyer gets a digital file with exclusive ownership rights. The blockchain nature makes it easy to verify the ownership. This kind of ownership makes it easy any arbitration process in the future.
Generally, NFTs simplify the process of monetization, for example, artists no longer have to rely on any auction houses to sell their art. Instead, they can automize the process of selling and even receive a percentage of sales whenever their art is sold to a new owner.
Learn more about NFTs in our related article «Crypto NFT: Reshaping the Art World».
Explore at Finscanner Marketplace
There are lots of NFT marketplaces that include collectibles, gaming items, and other virtual goods backed by a blockchain. As an example, probably the most popular one is the OpenSea, which has grown to over one million users since its launch, making NFT trading the mainstream.
Looking for more NFT platforms? Check out the Finscanner marketplace — a reputable place to discover thousands of financial services for individual and business needs. If you have any questions, feel free to contact us.