What is NFT in the Cryptocurrency World?

What is NFT

Kanalcoin.com – The world was shocked by the old tweet of the founder of Twitter, Jack Dorsey, which sold for $2.9 million. The short tweet which reads “just setting up my twttr” was uploaded on March 21, 2006 and is traded not by the usual auction system, but through NFT or non-fungible tokens.

What is NFT? What is the future of NFT? Why should you be enthusiastic about the growing popularity of NFT? Our article this time will thoroughly explore all the information about NFT that you must know. Come on, see!

What is Fungible Asset and Non-Fungible Asset?

Before looking further at NFT, it would be better if you understand the difference between fungible assets and non-fungible assets. An asset is anything that has value and is useful. The form can take various forms, it can be in physical form such as gold or digital form such as bitcoin.

The word “fungible” itself means “which can be exchanged”. Two similar assets can be exchanged because they have the same value. For example, one bitcoin must be equal to another bitcoin. There is no difference in value so the two bitcoins are possible to be exchanged.

This is different from non-fungible assets. Say you and your friend both have a horse. You decided to swap your horses. Of course this is not a commensurate exchange. Even though they are both horses, your horse’s memory, strength, and physical appearance are definitely different. In short, the two horses have different values.

That’s a simple analogy of non-fungible assets. Some other examples are houses, cars, and paintings.

What is Tokens in Cryptocurrency?

Simply put, a token is a digital certificate of ownership that represents an asset. Crypto tokens represent a variety of assets or utilities and can be used to raise funds, make sales or make payments.

The process of converting a valuable asset into a token to be stored in a blockchain system (digital transaction recording system) is called tokenization.

What is NFT (Non-Fungible Token)?

What is NFT? An NFT in cryptocurrency is a token of a unique digital asset that cannot be exchanged for another NFT. NFT is connected to the blockchain system and can take any form, from photos, videos, GIFs, memes, skins for certain game characters, and other works.

After knowing this, you might ask, what’s so special about NFT?

When a work goes viral, there will be lots of people copying and reposting the work. NFT can guarantee that there is only one original work and a unique and authentic original creator. Why does this happen?

Maybe you’ve heard the word “immutability” which is one of the working principles of blockchain systems. The word “immutability” means “eternity”. This means that every transaction recorded in the blockchain system cannot be changed or manipulated and will be stored forever.

For example, an artist sells his music as NFT which is then encrypted into complex, special and unique codes in the blockchain system. From there, it can be traced who the creator of the music was and who was the first buyer. In other words, the NFT becomes a certificate of an exclusive virtual asset.

How to Sell NFT?

Before selling your NFT, you must first know what blockchain you are running on. Some of them that are often used to issue NFTs include Ethereum, Binance Smart Chain, Tezoz, and Polkadot.

Each blockchain implements a different NFT token standard. For example, you create an NFT based on the Ethereum blockchain. You can sell it on a platform called opensea.io (one of the largest NFT marketplaces) because this platform is based on Ethereum. You cannot sell NFT on a platform based on the Binance Smart Chain.

Since Ethereum is currently the most popular blockchain, you can easily sell your NFT works on opensea.io. You just click “Create” on the website and then pay a fee to make transactions on the Ethereum network. The fee will be taken from the Ethereum (ETH) balance in your virtual wallet.

After that, you will be directed to create a collection page. On this page, you can give a name, include a logo to set commissions and royalties as you want. After you go through this step, you will be asked to put a digital signature as proof of the validity that you are the original creator of the work. Next, you just need to upload your NFT work.

How will NFT affect the future?

NFT is certainly a breath of fresh air for original creators in the midst of endless duplication of works. In the gaming industry, for example, game developers can sell digital items from their games. This will affect the economy in a wider scope as the amount of investment in the game industry itself increases.

Although it’s not really a new thing, the trend of NFT that is on the rise is a hope for art workers to continue working. So, are you interested in creating and selling your own NFT?


Muhammad Zaki Fajrul Haq
Author: Muhammad Zaki Fajrul Haq

Follow me at @mzfajrulhaq (Instagram) or @ZakiFajrul (Twitter).

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