On March 11, 2021, the art market exploded with the news that a major auction house was selling a digital work of art for the highest price of $69.3 million. It’s all about the format: non-fungible tokens are a unique marker. Thanks to new NFT technology, digital works of all kinds – images, videos, and even social media posts – can now be proven original. No wonder the art marketplace is excited about the emergence of a new way to prove the exclusivity of a work of art. Do you want to buy NFT? Before you invest money in digital pieces of art, learn what NFTs are and how they differ from ordinary tokens, what advantages blockchain brings to art, and in what place tokenized works are available for buying.
Recall that the landmark work-record holder was a popular collage of five thousand drawings “Every day. The First 5,000 Days,” which the artist Winkelmann, who goes by the pseudonym Beeple, has been creating every day since 2007.
Blockchain and Crypto
In short, tokens are units of assets on the blockchain. But what is a blockchain? It’s the opposite of the Internet connection system through providers when computers interact only through intermediaries (such a network is called decentralized).
Blockchain is a kind of digital “dormitory”: a distributed network where all computers are connected to each other and constantly store all the necessary data. In essence, a blockchain is a chain of blocks with information encrypted with a code, where each new data transaction fits into a new block. The information stored in them cannot be deleted or changed.
The idea of blockchain was described in the 20th century, but it was not until 2009 that it was put to use. An anonymous person under the pseudonym Satoshi Nakamoto proposed the concept of the Bitcoin payment system, which was based on the blockchain. Programmers who tried the system found many advantages in it, and it soon spread throughout the world.
Cryptocurrency rotates in the world of this payment system – electronic money or “coins” that do not physically exist. Their records are kept using a code in the same blockchain or, as it is also called, an electronic registry.
The successful implementation of Bitcoin has prompted many programmers to develop similar blockchain-based platforms, the most disruptive of which was Ethereum. The difference of this system is that it is quite easy to program, which means that everyone can experiment with its code, develop applications based on it and create their own assets.
These assets are called tokens; they can be stored and transferred in the same way as the cryptocurrency of the platform itself called an Ether coin. The tokens we are talking about now are fungible tokens, but there are also non-fungible tokens or NFTs you can buy and sell. What does it mean?
What Are Non-Fungible Tokens?
So, what is NFT technology? We can call non-interchangeable a thing that is exceptional due to its characteristics, which formally cannot be replaced by the same thing. The best example is items that were produced in a large edition but then endowed with original properties: a written notebook, an autographed book, etc.
In the digital environment, cryptocurrencies or ordinary tokens are interchangeable: one Bitcoin is no different from the other, just like two shares of the same company. More and more people want to know how to invest in NFT technology as NFT is a unique token that is assigned to a certain image/audio/video/text/game asset/Internet address and gives it the status of exclusivity. new NFT collections Top NFT collections can be thought of as a password-protected link to a digital file included in the blockchain chain and owned by a specific person. You can start learning about NFTs and watch the chart of trending collections from famous artists for free on the Top NFT Collections website.
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