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NFT or Non-Fungible Token is a unique digital certificate stored on blockchain. These assets are proving a powerful tool to establish and demonstrate ownership rights in the digital asset space where it is often hard to demonstrate such rights given how quickly and easily digital art can be replicated. These tokens are minted using a smart contract which is a computer code stored on a blockchain. The collectible token includes a few different fields like unique identifier, wallet address, and a link of where the digital work is associated with the token.
Each of these crypto collectible tokens are described as non-fungible as each of these are unique and have different values. In contrast these assets are non identical and non-interchangeable as Bitcoin and US dollars.
Are these NFT tokens beneficial?
NFT tokens are always scarce as they are one of a kind and stored on a blockchain forever. These assets are associated with an asset, mostly a digital one that is always unique. In some cases an artist or rights holder may elect to have a smart contract that is generated with a limited number of Non-Fungible assets for the same work. This can be compared to a limited edition of a physical work.
Authenticity is a factor that makes the tokens beneficial, as once an NFT is minted anyone would be allowed to view and access to confirm the metadata, ownership history, Token ID, blockchain address and other information. Moreover, as the transactions on a blockchain are transparent, buyers can see the address from which the unique collectible was first minted.
How did this millennial innovation emerge?
The concept of these collectible tokens were there for a long time, but it is Ethereum’s smart contract technology that helped the concept to emerge. It wasn’t until late 2017 when a digital cat-trading game known as CryptoKitties went viral that NFTs gained momentum.
Later these assets began to be widely accepted within the cryptosphere in 2018 with the release of a common digital standard ERC-721 for minting these assets on the Ether network. And today, we can all witness how big the industry has grown with a number of artists.
What is minting of a Non-Fungible Token?
Minting of an NFT is referred to the process of creating a digital collectible while recording it on a blockchain for the first time. The minter of the token could also be deemed as the creators of the work associated with the NFT like an artist or someone with the appropriate rights to mint an NFT of a digital asset.
In the current scenario, there are numerous third-party NFTs platforms or marketplaces that provide services to help creators and rights holders to mint these crypto collectibles. Some of these platforms also serve as a trading hub where users are allowed to trade their one of a kind cryptocurrency token.
Are these NFTs representing ownership?
NFTs are deemed as the certification of ownership of the underlying assets. However, in general anyone in the industry is allowed to download, make a copy, screenshot, or store the digital work offline. But this won’t give the true ownership of the digital art pieces. However, it is significant to note that until someone misuses the copy of the NFT to publish on websites or try to sell to someone, screenshotting or downloading a copy of the asset is legal. But if someone has any sort of bad intention with that the true owner of the token might sue the person as there are some existing rules and regulations available.
