What are Non-Fungible Tokens? All you need to know

Non-Fungible Tokens, the latest multi-million-dollar cryptocurrency phenomenon, suddenly has captured the world’s attention. NFTs are not exactly new, they have been here around for a decade. Know more about them here. 

Created On: Apr 6, 2021 17:57 IST
Beeple's digital artwork auctioned as NFT
Beeple's digital artwork auctioned as NFT

Non-Fungible Tokens, the latest multi-million-dollar cryptocurrency phenomenon, have suddenly captured the world’s attention in recent months. These unique digital assets have been gaining tremendous momentum in India as well.

Indian programmer Vignesh Sundaresan paid nearly $70 million for the digital artwork that was sold as an NFT by digital artist Michael Joseph Winkelmann, also known as Beeple. 

Twitter CEO Jack Dorsey’s first-ever tweet ‘just setting up my twittr’ was also auctioned off as an NFT for more than $2.9 million.

India’s first marketplace for NFTs

Keeping up with the recent boom, India’s biggest cryptocurrency, WazirX, launched the country’s first marketplace for NFTs. 

The platform will enable the exchange of intellectual properties and digital assets, including videos, audio files, art pieces, tweets, and other digital goods and services. Indian creators can put their content for sale on the NFT marketplace.

What is an NFT? 

NFT stands for Non-Fungible Tokens.

•Non-Fungible Tokens are unique crypto assets. The non-fungibility of these tokens, unlike bitcoins, makes them irreplaceable and non-interchangeable with another similar asset. Nor they can be broken down into smaller denominations like bitcoins. 

•An NFT is a digital object that can be animation, memes, tweets, arts, drawing, photo, video, or piece of music, with a certificate of authenticity created with blockchain technology. An NFT or digital object is unique and can be exchanged or sold with its certificate. 

•An NFT will have one owner at a time. The ownership details of an NFT are stored on the blockchain. Unless mentioned in an explicit license, owning an NFT does not give copyright or usage rights to the digital object. The world of digital art is witnessing a revolutionary change with NFTs that are aiding in countering the issue of ownership.

•NFTs date back to the mid-2010s but went mainstream in 2017 with CryptoKitties, one of the world’s first blockchain games that allow players to adopt, raise, and trade virtual cats.

How do Non-Fungible Tokens work?

Currently, most NFTs exist on a single blockchain – Ethereum blockchain.
Ethereum is a cryptocurrency platform that uses smart contracts and thus, each NFT is indestructible and cannot be replicated. The ownership details of any digital object stored on the blockchain can be traced back to the original creator.

Indian artists and creators can benefit from the indigenous cryptocurrency platformWazirX, the country’s first marketplace for NFTs.Users can create videos, audio files, art pieces, or list their intellectual properties such as tweets, andlist them on the platform for auction.

Future of Non-Fungible Tokens 

•As per the NFT Report 2020, NFT sales crossed $100 million during the pandemic in 2020.

•In India, the government and the RBI are contemplating a framework for cryptocurrencies. NFT enthusiasts should note that the NFT ecosystem is an unregulated market of cryptocurrency because it is a new concept in India.

•As per the market enthusiasts, NFTs could be the next big thing that could one day revolutionize the way we execute transactions related to money, property, or any virtual asset. The traditional agreements could be replaced with smart contracts that run on blockchain technology.

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