The popularity of NFTs has witnessed an explosion in the last year with some NFTs being sold or auctioned for millions of dollars. From cartoon tapes to video clips, sales of NFTs climbed $25 billion in 2021 as the crypto asset exploded in popularity, a market tracker data revealed.

NFTs are not just jpegs. No, It is not enough to right-click and save it on your PC.

A article from valid sources to have a clearer idea around them.

Introduction

Digital artists are changing their lives change thanks to huge crypto sales.Celebrities are spotting new opportunities to connect with fans.

But NFTs are way more: they can be used to represent ownership of ANY unique asset.

NFT: Non-Fungible Token

Non-Fungible:

Term to describe something that is unique & not exchangeable with others due to unique properties.

Token:

NFTs are tokens that are used to represent ownership of unique items (e.g: real estate, art, collectibles).

NFT key concepts

• NFTs can only have one official owner at a time
• NFTs are secured by the Ethereum blockchain
• nobody can modify the record of ownership

Fungible items

Ok, but what is "FUNGIBLE" instead? Fungible items can be exchanged: their value defines them rather than their unique properties.

Example: 1 dollar or 1 ETH is exchangeable: they are fungible

The internet of assets

Digital items often only work in their ecosystem. e.g.:

• you can't re-sell an mp3 you bought.
• you can't exchange one company's points for another one.

NFTs aims to solve some problems of the digital items:

• uniqueness
• scarcity
• proof of ownership.

NFTs ability

NFTs give the ability to assign/claim ownership of any unique piece of digital data, trackable by using Ethereum's blockchain as a public ledger. An NFT is minted from digital objects as a representation of digital or non-digital assets.

NFT Examples

These are just some examples of NFT.

Digital Art:

• Jpgs
• GIFs
• Music
• Videos
• Collectibles

Real-World Items:

• Deeds to a car
• Tickets (to a real event)
• Tokenized invoices
• Legal documents
• Signatures

Ownership

An NFT has one single owner at a time with:

• uniqueID
• metadata

NFTs are minted through smart contracts that:

• assign ownership.
• manage the transferability.

When an NFT is created, they execute code stored in smart contracts for a standard (e.g.ERC-721).

The Minting Process

High-level minting process steps:

• Create a new block
• Validate the information
• Record the information

NFTs Special Properties

• Each token has an owner (easy to verify).
• Each token minted has a unique ID (directly linked to an address).
• They're not directly interchangeable with other tokens.
• They can be bought/sold on any Ethereum NFT market.

What can you do if you OWN an NFT?

• You can easily prove you own it.
• No one can manipulate it.
• You can sell it (in some cases, royalties will be paid to the creator).
• You can hold it forever, as long as your wallet is secured.

What can you do if you CREATE an NFT?

You:

• can easily prove you are the creator.
• can sell it on any p2p or NFT market.
• can earn royalties every time it's sold.
• are not platform-dependant.
• don't need intermediates.
• determine the scarcity of the NFTs.

NFT Royalties

Some NFTs will automatically pay out royalties to their creators when they're sold (e.g. eulerbeats).Some platforms support royalties (e.g Foundation, Zora) This is still a developing concept but it's very powerful.

NFT Scarcity

It's like deciding the number of tickets for an event.NFTs may have some small differences, but they still have a single owner.The intended scarcity is up to the creator of the NFT.This information will be public.

NFTs' standards

Most NFTs are built using the ERC-721 standard. Other standards:

• ERC-1155: for semi-fungible tokens and useful for gaming.
• EIP-2309: proposed to make minting more efficient. It lets you mint any number of Nfts in a single transaction

source: Ethereum docs

There is a lot more to say about NFTs, but for now, I'll stop here. Some upcoming topics might be seeing what they are used for, talking about their environmental impact, seeing their relationship with DEFI.

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