What is NFT?
Can NFT change the world and what is actually auctioned off for millions of US dollars?
In early 2021 mankind found something new to go crazy about. We saw the emergence of a new quite sophisticated Internet technology that enabled people to value, buy and sell things in a nonphysical way and is referred to as NFT. NFT is an absolutely new type of digital asset in the history of technological development.
What does NFT mean, and how do tokens appeal to our instincts?
Non-Fungible for non-replaceable
NFT stands for Non-Fungible Token, where non-fungible means something unique with significance and emotional value to at least one person. In other words, it is something non-replaceable.
With that in mind, let's imagine you want to buy a phone. You pick the gadget you want and make an order. At this stage, it does not matter to you what particular box from hundreds of boxes with phones will be delivered to you. They are identical and therefore replaceable. But if you only keep using it for a year, the item will change its status to non-fungible since now it carries your pictures and videos, banking information, and personal contacts; therefore, it has significant practical and emotional value.
What is a Token?
A non-Fungible Token is a unit of unique digital data stored online. Only people determine the value of each piece, judged again by the level of uniqueness and emotional appeal. This has been the reason behind an increasing rise in the crypto art and collectibles market. Uniqueness and emotional value appeal to people more than anything else, and NFT has enabled the crypto market to prosper.
What can be turned into NFT?
Last year we saw so much inspiring, and shocking news about some NFTs sold to people for crazy amounts of money. These were:
- images of video game characters
- digital land
- video clips
- video shots of sports games
- the first tweet sold by Twitter CEO
- digital art pieces
And many other sorts of information. The interesting thing is that a buyer gets only a digital record of it.
But why would people pay money for something they can watch online any time for free?
A big fuss over NFT is purely psychological. Mankind has received a new way to claim individual rights to an asset publicly. NFT has inflated our sense of self-importance. The art community is thrilled with the possibilities that NFT opens to artists, both digital and physical, all over the world. Celebrities are fascinated by it. NFT is definitely developing and maturing very fast. So let's wait and see where it brings us.