What is NFT? Simple explanation

What is NFT? Simple explanation

Non-replaceable tokens cannot be invisibly exchanged, divided, replaced. The system is suitable for fixing the right to a unique object - the creation of art, real estate, artifacts in a computer game.

Simply put, every record in a blockchain is called a token. In the open blockchain, all tokens are like coins of one monetary value, equal and interchangeable. Cryptocurrency money does so and works: for example, one bitcoin can be easily replaced by another, and nothing will change.

But Non Fungible Token (NFT) technology changes the rules of the game and works differently. An irreplaceable token is a digital coin that cannot be exchanged for another token without changing the value and value of the object.

As well as cryptocurrency, NFT creates a blockchain, which acts as a database for recording all transactions. Blockchain guarantees the authenticity of non-replaceable tokens. Thanks to this system, any user can verify the original and the history of a specific NFT through a blockchain.

By purchasing an NFT token, the user acquires a certificate for the work. At the same time, the work itself does not move anywhere. It is located in the Eternal Preserve (IPFS). This certificate is in essence - the lines of the code, which confirm that it is the owner of the token is the owner of the original copy of the object. NFT tokens are compared to a picture that can belong to a gallery, museum or private person, but the audience can see it in a catalog or at an exhibition.

NFT tokens are sold in online marketplaces that work like AliExpress or Wildberries. The creators of non-replaceable tokens place them on the trading platforms and wait for offers from buyers.

NFT tokens can even be created independently. To do this, you need to take a digital object (picture, music track, photo and more), register in a special marketplay (for example, on the site Rarible or OpenSea) and download the object with a description and price. On many services will have to pay a commission for creating a record in the blockchain, that is, a unique token.

Translated by:Standard.kz