Let’s talk about NFTs: What are NFTs?
If you have been using the internet in the past few years, you have come across NFTs, and you may be wondering, “what’s the fuss about these cartoonish pictures, and why do they cost a shit ton?.”
What is an NFT?
An NFT means a Non-Fungible Token. That definition is useless to an average non-crypto person, so let’s break it down.
Let’s start with Tokens. Tokens are cryptocurrencies without a blockchain built on or using another blockchain for implementation. Let’s say you want to create your cryptocurrency but don’t want to or can’t create a blockchain for any reason, you will need to choose a blockchain to launch your cryptocurrency on, and it will be a token on that blockchain.
So, what does the Non-Fungible stand for in NFTs? Non-Fungible means a token is unique; there can only be one ever to exist. To further help you differentiate between Fungible and Non-Fungible tokens, imagine holding a fistful of cash of the same denomination. They are all the same for all intents and purposes; a dollar bill issued by the United States treasury spent in New York is the same as the one being exchanged at your local bureau de change for your local currency. In the same vein, 1 ETH is equal to 1 ETH.
NFTs are cryptographic assets on a particular blockchain with unique attributes and metadata encoded in them. These assets may or may not be tied to tangible assets in the real world.
NFTs are often presented as pictures but can also come in other formats such as audio and videos, and this leads people to think they can “right-click save” an NFT. However, it’s not that simple. The JPEG that you just saved does not exist on the blockchain and doesn’t contain all the metadata needed to make an NFT.
If you end up creating an NFT with the JPEG or audio or vid, you still won’t have the cryptographic information to prove authenticity and ownership. The same way a counterfeit dollar note cannot pass for a real one under scrutiny, a fake NFT cant pass for a real one. NFTs take this up a notch since they are deployed using immutable smart contracts, meaning if the smart contract didn’t create your NFT, it cant pass for the real one.
This post is the first out of a series, so be sure to check back for updates.