NFT is an abbreviation of words known very well within crypto space as “Non-Fungible Tokens (NFTs)”. It is a type of asset (a digital one) which is comprised of unique tokenized digital currency or digital assets. They may happen to be scrap for being used as digital currency but have their own pre-defined uses, for example, crypto art.
However, in the prevailing crypto space, they are regarded as one of the most essential and critical parts of the crypto industry. But that’s not all, in fact they are high in demand these days and the crypto fanatics are going berserk to acquire them.
As the word “fungible” suggests, it is something that can be replaced by an item that is similar to the earlier. For instance, a man is in possession of US$ 100 and a Bitcoin. They both have their own pre-determined values and can be interchangeable with each other.
The difference between the two is their ultimate use. Bitcoin, for instance, being a cryptocurrency, can be used to sell, purchase, exchange, and/or acquiring or rendering services. But on the other hand, the use of NFTs is limited – it is often used to acquire digital collectibles, digital art materials etc. exclusively.
To keep it simple, a day ago i.e. 10th March, 2021, a famous American rapper has disclosed the launching of its NFTs. The rapper, who goes by his professional name, Lil Pump, informed that he would like to publicly offer NFTs containing a digital art collection. A collection that contains famous songs of the rapper visually made available in the NFTs. These NFTs will then be sold under an auction by an NFT issuer company. In the case of Pump, the company is told to be Sweet.
Another prominent example of NFTs could be seen from the world’s most popular crypto game – CryptoKitties.
CryptoKitties was not only the world’s popular crypto game but it was the first one to be launched on the basis of blockchain technology. In the game, the players were required to own virtual kitties. These kitties were to be adopted, taken care of, fed and raised till they are young and then could be sold. The in-game proceeds earned by the player on the sale of a virtual kitty were called “NFTs”.
Once proceeds were transferred to the player’s account, it can then neither be replicated nor is the owner dispossessed from holding them. But it was just the beginning of NFTs which was soon to become a craze amongst crypto investors.
If one were to weigh the NFT craze, then the latest example is the events that took place recently on 15th February, 2021. An NFT was put for auction consisting of digital collectibles belonging to famous artist, Mike Winkelmann, who was also known as Beeple. It took less than an hour for the NFT’s value to soar from US$ 100 to a price more than US$ 1 Million.
That is why NFTs are regarded as the “revolution within innovation”.