Are you struggling to have a hold on the concept of NFTs? Everyone in today’s time is rattling on NFTs and their relatable terms. It’s okay; holding yourself accountable for not understanding the latest technological trends shouldn’t be something to blame. After all, who will believe that a digital photo is getting sold for millions of dollars?
However, you are always thinking and analyzing what the hype is all about? Or is there something massive you are missing out on? Because million-dollar transactions are happening regularly on account of NFTs.
What is an NFT?
Whenever you ask someone, what is an NFT? They are likely to respond similarly to a Google Search that NFTs are Non-Fungible Tokens. Does this answer help? I mean, what does a non-fungible token mean?
Non-fungible means that the token is not mutually interchangeable. Non-fungible tokens are one of a kind. When you purchase an NFT, there is nothing indistinguishable like it on the web or in the whole world. NFT in simple terms, are non-replaceable.
Let me elaborate a little to have your concepts cleared. Let’s talk about bitcoin. What is bitcoin, and are those fungible or non-fungible? Bitcoins are fungible, which means one bitcoin can replace another bitcoin having the same value, but it’s contradictory in the case of NFTs.
For instance, Jack Dorsey’s first tweet got sold for 2.9 million dollars as an NFT. Everyone through Twitter can download it, but it’s not replaceable. Blockchain technology provides unique signatures attached to each of its tokens, making the NFTs non-fungible.
What is blockchain technology?
Now let’s understand the concept of blockchain technology. Blockchain technology refers to the digital ledger of transactions secured online having no physical accountant to oversee the procedure. Without having a physical watchdog to supervise online, transactions are safe and secure. It’s possible through the massive network of computers that corroborate the blockchain technology 24x7.
If anyone tries to hack or tamper with the transactions recorded in the blockchain, every computer system will get to notice it. Moreover, hacking into the massive network of computers requires high-end computing power. The ledger, on the other hand, takes care of itself. Thus, if you get caught up somewhere, you need to check blockchain records, which will serve your doubts.
How does a transaction get into the blockchain?
Here are some of the steps that are required for the transaction to get into the blockchain:
§ A transaction is requested and verified
§ A block representing the transaction is created
§ The block is shared with every member in the network
§ Nodes approve the transaction
§ Nodes receive a reward for proof of work in the form of cryptocurrency
§ Then, the block adds on to the existing blockchain
§ The update is distributed across the network of participants
§ The transaction process is now complete.
NFT’s get their desired value through the invariability of the blockchain. Moreover, if you purchased an NFT, you can prove it to be yours, thanks to the token proving your digital copy as the original one.
Are NFTs the subsequent significant investments or a bubble waiting to burst?
Honestly, it’s hard to say whether NFTs will…
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