The most important information about NFT: what is it, why, where does this popularity come from?

NFT tokens are a relatively new issue on the Internet. As a result, many of you are still asking, “NFT, what is this?” Today we will touch on this topic, trying to answer the most important questions.

The popularity of NFT is undeniable (although in the light of recent events, things may soon become more difficult). But where did it come from? What exactly? What are the tasks? However, for some Internet users, there are still many unknowns on this topic. So we come to help, tries to answer the most popular questions in a simple way Related to NFT.

NFT – what is it?

Let’s start by developing the abbreviation itself, which refers to words “Non-working token”, which has a clear meaning in our language “Unchangeable token”. Each NFT is unique and has no analogues anywhere else – this is possible thanks to technology that prevents the creation of two tokens representing the same data line. So when we buy an NFT buckle, we can now be sure that we have a real white crow.

Note that tokens are digital based on the Internet blockchain. This is the same network that supports cryptocurrencies where Bitcoin is at the forefront. However, any similarities end there: NFT tokens they have no predetermined value and, as already mentioned, are unique. This means that we cannot exchange one NFT token for another – we can resell or buy it, but it will always remain a single item.

The NFT token is as unique and valuable as the original Mona Lisa? For many, this comparison will be exaggerated

What can an NFT token be? In fact, there is no such thing as a special kind image file, video, game element or skins, avatars, GIFs, even plain text file. The only condition is to confirm that the file is unique and does not have a copy of itself, which is reflected. appropriate digital recording, forms a special certificate of uniqueness.

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Holders of such tokens often have a special favor assigned to these digital assets. This specification includes NFT tokens used as assets corresponding to specific works of art, for example, songs, photos, music videos, pictures, or trading cards.

History of non-exchangeable tokens

The issue raised caused a stir for the first time 2014. It was May of this year Kevin McCoy and Anıl Daş created Quantum. At first, it was a video made by his ex-wife. McCoy then registered them on the Namecoin blockchain and sold them to Dash at the conference Seven seven In New York … for $ 4.

However, in the first stage of their existence, they did not gain much popularity. The Etheria project, the first major project to sell more NFT, was a case in point. consisted of 457 hexagonal plates Although it has been put up for sale, most of them have not found their owners for 5 years.

Cryptokilites
One of the cats in the game CryptoKitties. Its worth? 600 ETH. At the current exchange rate of this cryptocurrency, it is already … 6 million PLN | Source: cryptokitties.co

However, interest in the topic of NFT has arisen before. happened in 2017, according to the game CryptoKitties, is about raising cats with virtually no specific purpose. Sounds like a cliché? Maybe the business was a bull’s eye. Well, every cat in the game is an NFT token – almost the first virtual pet sold $ 120,000. It was then that a large-scale realization of how much money was in NFT took place.

Increasing popularity

Another boom has begun in non-convertible tokens 2021. This is due to the increase in cash investments in virtual works of art. It should be noted that such works can be found among others The first post on Twitter, Developed by the founder of the platform – Jack Dorsey. This entry is for sale only $ 3 million. Virtual author’s work WhIsBe (Unforgettable, But Gone) sold out million dollars. These amounts must be impressive.

See also: How to withdraw cryptocurrencies? Everything about how to start

It primarily affects the popularity of NFT tokens artists, celebrities and athletes. Their work is increasingly being broadcast with NFT tokens, such as movie stars and athletes. It is designed to treat buyers get a unique work with a collection value, over time, this can become quite a real amount.

Why do NFTs reach astronomical quantities?

It should be noted in themselves NFTs have no value, for example, in the sense of a precious metal. This is what moves them uniqueness. By having an NFT token, we can be sure that we have something that no one else in the world has. They are often born here comparisons with original works of art – will never reach the same value as the original, as are the copies of the most famous paintings. The painting itself, for example, is not as valuable as a gold bar, its value is based on it social contract.

This is similar to NFT tokens (many people do this is controversial), is great for its uniqueness importance of the collector, which increases their value. It’s all about spending a very limited amount of good (NFT tokens). People may not care about the lion’s share, but if we add a famous one (for example, a badge depicting a famous basketball player), there will always be someone who wants to spend a crazy amount of money. to be able to emphasize your elitism.

How is NFT created?

In principle, anyone can create the digital data units discussed here. What is needed for this? First, we must be member of the selected cryptocurrency exchange. This is necessary because it will be responsible for converting our digital data into NFT tokens. When choosing the form of our information (it can be any), we are obliged pay an additional starting fee in cryptocurrency, to start the whole process.

However, this does not mean that the car will receive an NFT token for a dizzying amount. That would be the case in 2015, but not now. What raises its value is its elitism – a sign of that created in collaboration with a famous athlete will be more expensive more than the same sign created by an anonymous person.

There is also an important point to have intellectual property rights, What we want to turn into NFT. Be it a picture, GIF, song, movie or anything else – we must own it. Creating an NFT label from something we don’t own can put us in serious legal trouble.

Are tokens a stable and reliable source of income?

Do you have some cryptocurrency and are thinking of entering the world of NFT? Think carefully, preferably several times. NFT tokens are the opposite of fixed earnings. Their boom is long over, so you can’t rely on your interest in something new.

Also check: What are cryptocurrencies? Brief information about cryptocurrencies

NFT itself is in vogue, and how long people will consider it worth investing. As we have mentioned, this is a social contract that only makes sense when people are willing to pay for it. And as recent events have shown, it varies a lot.

Declining market?

Perhaps we are witnessing the final stage of NFT’s popularity. However, according to a quarterly report by nonfungible.com There is no talk of a collapse yet, the trend seems to be slowing down more. Sales volume in the first In the first three months of 2022, it decreased by almost 50%. Declining popularity affects both sales and active portfolios (reduced 76% Compared to November 2021), it does not promise anything good for the future. The development of the situation clearly proves this Making easy money in NFT is a thing of the past.

What is nft - the first 5000 days
Every day: The first 5,000 days, By Beeple – a close-up shot of two fragments of a work of 5,000 illustrations Source: bbc.com

NFT tokens, like any cryptocurrency, are included speculative assets. Their purchase is often based on “buying now in the hope that the value will increase in the future.” Such an assumption, however, can be two-sided, because investing can be a loss and a lot. The situation in the world is also one of the factors – their main influence here rising interest rates, This is not just about Poland. This is one of the biggest blows to the NFT and cryptocurrency markets and is beginning to lose their attractiveness.

However, crypto and NFT have certainly not collapsed yet worries about future prospects. 2022 could be a major year in terms of events, and it will decide whether these institutions are for both.

Also check: What is a cryptocurrency culture? How does it work?

Is NFT’s criticism justified?

Opponents of non-exchangeable tokens have strong enough arguments to disrupt the meaning of the entire enterprise by closing it. instantaneous and devoid of logic. The most popular argument is whether we need NFT and its existence for anything. It is based on value the framework and aesthetic values ​​adopted by the contract are controversial. The comparison of NFT and its works of art is exaggerated, as icons will not provide visual impressions, such as famous paintings.

This is a greater danger impact on the environment. Computing operations require millions of processors. They need electricity to power them, and as a result they are formed large amounts of greenhouse gases. The calculation adds three cents to the greenhouse effect that affects the entire planet.

What is nft - energy consumption
NFT, like cryptocurrencies, consumes large amounts of electricity, thus contributing to increased greenhouse gas emissions | Source: wingsdailynews.com

Another problem is plagiarism. Demonstrating other people’s work as NFT can sound really loud. One person in 2021 Introducing himself as Banksy, he sold the artist’s work for $ 336,000. Another incident is the Qing Han spy. After his death in 2020 The scammer seized his identity and in the process sold his works as NFT tokens. Unfortunately, plagiarism is easy to create NFT, and the anonymity of its creation does not facilitate the prosecution of fraudsters.

It should be added that the structure of the token exchange is similar to the so-called Ponzi schemes. This is a type of financial pyramid in which the initial investors are paid by the subsequent buyers.

NFT – what is it? We hope that this text brings you closer to this issue and eliminates any misconceptions that may arise. Let us know in the comments what you think about NFT.

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