What is an NFT?

There’s no doubting the current hype for NFT’s, after all $5 billion dollars worth of them were traded in January 2022 alone,and in just one marketplace to boot (OpenSea).

But what is an NFT? And will it be as innovative as people expect?

Blockchains

First, let’s take a moment to explain what a blockchain is, since that’s the foundational technology for NFT’s. A blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets (both tangible and intangible) in a network. Transactions on the network are recorded in blocks, attached to the blocks before it in a way that prevents tampering. This chain of transactions is called a blockchain https://www.ibm.com/topics/what-is-blockchain What is Blockchain Technology? - IBM Blockchain | IBM Learn the basics of blockchain technology to discover why businesses worldwide are adopting it. Your understanding of blockchain for business starts here. CONE Phantomhaze — 01/16/2022 Now, to explain NFT’s we’ll begin by breaking down the term, Non-Fungible Token. Fungible assets are those which we can swap around without changing it’s value. For example if we were to exchange $10 bills, or 1 BTC for another BTC, we would have the same value as we did before. However we wouldn’t be so quick to swap glasses, wallets, or our house keys, because those aren’t as replaceable. They’re non-fungible CONE Phantomhaze — 01/16/2022 Ethereum was the first blockchain that NFT’s were implemented on. Ethereum adds to their blockchain model the capability for general-purpose compuation, in the form of their Ethereum Virtual Machine (EVM). The EVM reads and executes smart contracts (source code), and makes changes to the network. It is with the ability to write smart contracts that developers started defining tokens, at first fungible like Ether (the currency of the EVM), but eventually this gave way to tokens with data on them, making some tokens unique and distinguishable. The result is a token that can’t easily be exchanged with another arbitrary token of the same type, or a non-fungible token. What are NFTs used for? Currently the most popular use for NFT’s has been in making digital collectibles, such as cryptopunks or doodles. But they’ve also been used to act as proof of membership for some online organizations (DAO’s).