Non-Fungible tokens are cryptographic tokens that represent the ownership of digitally scarce goods or commodities such as art, collectibles, or even real estate.
What Do You Mean By Non-Fungible?
Non-fungible means something which is unique in nature and cannot be exchanged for anything else. Fungibility is a characteristic of a good or a commodity where each unit is interchangeable and indistinguishable from one others. Fungible items can be exchanged because what defines them is their value itself and not any unique properties.
For example, if you have a currency note of Rs.200, you can easily replace it with another currency note of Rs.200 or two notes of Rs.100 without affecting the value exchanged. For instance, Bitcoin is also fungible, which means you can exchange one Bitcoin for another. a piece of art created as one unique copy is an example of a non-fungible. NFTs are part of a new digital investment that has exploded over the past year. What makes these assets that are sold on the internet so valuable
Relevancy Of NFT In India
Blockchain technology enables NFTs to be publicly authenticated, serving as a digital signature certifying the ownership. NFTs cannot be exchanged on a like-for-like basis as each one is unique in contrast to fungible assets like stocks, dollars, or bars of gold.
NFTs can only have one legal owner and are secured by the Ethereum Blockchain, i.e. ownership records cannot be modified. An art collector, Pablo Rodriguez Fraile, bought a 10 seconds video clip by an artist for $67,000 (approx. Rs.50 lakh in Indian rupees) and sold it for $6.6 million (approximately Rs.48 crore).
Jack Dorsey, founder of Twitter sold his first-ever tweet 15 years ago through NFT. NFTs can be various digital forms like drawings, videos, GIFs, music, a game, any art, etc. However, currently, In India, the popularity of these tokens has gained to sell digital art using blockchain technology. You can copy the file as many times as you want, including the digital art, through NFT. However, NFTs are mainly designed to give the ownership of such digital art, whereas the artist can retain the copyright by himself but sell its ownership to another person.
Every NFT is a unique token on the blockchain network. NFT could be one unique piece without any copies, whereas it could also be a trading card with hundreds of copies of the same artwork. NFTs can have only one owner. This ownership is managed by using a unique ID and metadata that is unique to a particular NFT. NFTs are executed through smart contracts, which assign ownership and transferability of the NFT.
The creator of the Non-fungible token (NFT) can decide the scarcity of the assets. et. For e.g., consider a ticket to a concert. The creator of the NFT can decide how many tickets will exist. Sometimes the tickets could be similar, just having a ‘general admission’ permit. At the same time, they can be slightly different, like having seat no. assigned to each ticket.
Most of the NFT Non-fungible tokens are a part of the Ethereum blockchain. Ethereum is the type of cryptocurrency, but its blockchain also supports it. How are NFTs useful presently? If you are an artist, then NFT will give you the medium or platform to sell your artwork. NFT has a feature that pays you every time it is further sold.
Common Features of NFTs are as follows;
• Unique – Each NFT has a unique property usually stored in tokens metadata. NFTs are unique in their character, and no two NFTs are identical. On the contrary, an original image.
• Indivisible – Most NFTs cannot be split into smaller denominations; you cannot buy or transfer a fraction of NFTs.
• Ownership– These tokens guarantee the ownership of the asset transferred.
• Fraud proof– They are easily transferable and fraud-proof. Non-fungible tokens could represent
• Digital arts like GIFs (graphics), collectibles, music, and videos.
• Real-world commodities like purchase-sale deeds of a house property, car deeds, tickets to concerts, legal documents, signatures, etc.