26 November 2021

NFTs - what is the fuss about?


Anete Garoza explains the definition of NFT and its implication in the ownership of authors

NFTs or non-fungible tokens seems to be a very popular topic this year. Did you hear about that 69.3-million-dollar sale? The term "NFTs" has been all over the news lately. Attention is not drawn only because of the huge amount of the transaction. If you're not sure what an NFTs – or non-fungible token – is, let’s find out it together. 

NFT or non-fungible token is a collectible digital asset, which holds value as a form of cryptocurrency and as a form of art or culture. Art collectors can now supplement their portfolio with other types of assets but let us first clarify the term itself. 

NFT stands for non-fungible token – a digital token that's a type of cryptocurrency, much like Bitcoin or Ethereum. NFT is unique and can't be exchanged like-for-like, this is why NFT is not like any standard coin in the Bitcoin blockchain and is non-fungible. Blockchain is the basis for creating NFTs. Each user needs to create a pair of keys: a public key and a private key. This makes it very difficult to alter transaction data stored in blockchain.

It uses cryptography to chain blocks into a growing list of records. Each block is locked by a cryptographic hash, or string of characters that uniquely identifies a set of data, to the previous block. The transaction records of a chain of blocks are stored in a data structure called a Merkle tree. 


What about ownership and NFTS?

The types of NFTs are super-varied, but they could take the form of a piece of digital art or a music file. It could be anything unique that could be stored digitally and be thought of to hold value. For example, there is a marketplace for the best NBA moments of history - NBA Top Shot. It’s an application that provides users with the opportunity to purchase, collect and showcase digital blockchain collectibles containing exclusive content from NBA. Each Moment is an NFT on the Flow Network in NBA Top Shot.  When you purchase a Moment from NBA Top Shot, you own the underlying NFT completely. This means that you have the right to swap your Moment, sell it, or give it away

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