Friday, August 19, 2022

Follow Us

How does NFT work | What is NFT and how is it different from cryptocurrency

- Advertisement -

How does NFT work : NFT is also made of blockchain technology. It is a public ledger that keeps records of transactions. Blockchain allows digital information to be recorded and distributed.

- Advertisement -

Blockchain is a record of transactions that cannot be changed, deleted or destroyed. Blockchain is also known as Distributed Ledger Technology, ie DLT.

Blockchain technology is being used for other purposes along with cryptocurrencies. In particular the buying and selling of digital assets such as NFTs take place on the Ethereum blockchain.

- Advertisement -

NFTs represent both tangible and intangible objects in the digital world. These include things like art, GIFs, videos, music, messages and tweets.

Rajasthan Jan Soochna Portal 2022 | jansoochna.rajasthan.gov.in

Let us understand this with an example- Last year former Twitter CEO Jack Dorsey sold his first tweet ‘just setting up my twttr’ as NFT.

- Advertisement -

Posted in March 2006, this tweet, being an important part of digital history, sold for $3.8 million, i.e. about Rs 17 crore.

How does NFT work : Do you know how to draw cartoons? Or you make memes too. You have a good video or a special message done on social media.

So know that now you can make them your digital asset. No one else can copy your asset. You can also sell it online. If it is further sold again then you will also get its royalty.

By adopting this method, superstars like Amitabh Bachchan are earning crores of rupees these days. The funny thing is that all this will happen in the digital world through cryptocurrencies.

Such digital assets are called NFTs, that is, non-fungible tokens.

These days NFTs are booming like crypto currencies in the digital world. From the common man to the former CEO of Twitter, Jack Dorsey is also buying and selling NFT.

Dorsey has auctioned his first tweet by making it a digital asset for 17 crores.

So let’s know the answers to 5 important questions related to NFT …

What is Non Fungible Token (NFT)?

To understand NFT i.e. Non-Fungible Token, it is important to first know what is Fungible Asset?

We can understand a fungable asset with two examples. First – Rs 100 note and second – any cryptocurrency. One is a physical asset and the other is a digital asset, but these two can be interchanged with other similar assets.

Yoga for Snoring: Do these 4 Yogasanas to reduce snoring, learn the right way to do it

That is, a note of 100 rupees can be replaced by another note of 100 rupees only. Similarly a digital currency like bitcoin can be exchanged for another bitcoin of the same value. In contrast, NFTs (Non-Fungible Tokens) are digital assets that can be traded with cryptocurrencies such as bitcoin created through blockchain technology, but cannot be physically transacted.

Objects such as real-world art pieces, music, in-game videos are placed in the digital world in the form of non-fungible tokens, ie NFTs. These are coded through blockchain technology and placed in the digital world. This is the same block chain technology, through which coding is made to create cryptocurrency.

Like every cryptocurrency, every NFT has a unique code. That is, no one else has such a code in the digital world.

How does NFT work | What is NFT and how is it different from cryptocurrency

How does NFT work?

NFT is also made of blockchain technology. It is a public ledger that keeps records of transactions. Blockchain allows digital information to be recorded and distributed.

Blockchain is a record of transactions that cannot be changed, deleted or destroyed. Blockchain is also known as Distributed Ledger Technology, ie DLT.

Blockchain technology is being used for other purposes along with cryptocurrencies. In particular the buying and selling of digital assets such as NFTs take place on the Ethereum blockchain.

NFTs represent both tangible and intangible objects in the digital world. These include things like art, GIFs, videos, music, messages and tweets.

Let us understand this with an example- Last year former Twitter CEO Jack Dorsey sold his first tweet ‘just setting up my twttr’ as NFT.

Posted in March 2006, this tweet, being an important part of digital history, sold for $3.8 million, i.e. about Rs 17 crore.

How is NFT different from cryptocurrency?

NFT is a non-fungible asset and a cryptocurrency is a fungible asset.

The coding of NFT is similar to that of cryptocurrencies like Bitcoin or Ethereum. The coding of both is unique, that is, there is no other digital asset like them.

Both are unique because of their unique coding, but NFTs can only be bought or sold through cryptocurrencies.

 

How does NFT work | What is NFT and how is it different from cryptocurrency

How is NFT used?

Blockchain technology and NFTs give artists and content creators a great platform to monetize, that is, sell their valuables.

Clearly, an artist no longer has to rely on galleries or auction houses to sell his art.

The artist can sell it directly to the consumer as NFT. They also get more benefit from this.

Not only this, if an artist’s creation is sold elsewhere, then they will also get royalty on it. This feature is only available in NFTs. Usually, an artist gets money only when his art is sold for the first time.

How does NFT work | What is NFT and how is it different from cryptocurrency

How can NFT be bought?

If you want to create your own NFT collection then the first thing you need to do is have a digital wallet.

Through this wallet, you will be allowed to store NFT and cryptocurrencies.

The wallet must contain any cryptocurrency, such as Ether, through which NFTs can be purchased.

You can now buy cryptocurrencies like Ether using a credit card on platforms like Coinbase, Kraken, eToro, PayPal and Robinhood now.

These platforms charge some percentage on every transaction. Keep this in mind while transacting.

- Advertisement -

Follow Us On Google

Related Articles

- Advertisement -

Latest Articles