Non-Fungible Tokens, or NFTs, sell in their millions and for millions. These days, it feels like you can’t open a newspaper without reading about some wild new NFT hitting the market. Whether it’s bored apes or in-game collectibles, NFTs have quickly become a very normal part of our daily lives.
This is why it can be a bit embarrassing to admit we have no real idea what they are. They came along so quickly, there are lots of people who never managed to get a grasp on what on Earth these new innovations actually mean.
But you don’t need to be embarrassed anymore. We’re here to answer the question: what are NFTs and how do they work?
No, Really, What Is an NFT?
Before we describe an NFT, let’s describe the blockchain. A blockchain is, at its core, a ledger that exists on multiple devices and preserves the same info on each one.
Blockchains can’t be hacked or tampered with because they don’t exist in one, accessible location. They’re spread out, so altering one doesn’t alter its duplicates on those other machines.
This is why people trust cryptocurrencies and why they’re now investing in NFTs. If you own something on a blockchain, you can trust you’ll still own it when you wake up tomorrow morning.
So what is an NFT? Essentially, it’s an entry on a blockchain (usually the Ethereum blockchain) saying you own a particular artwork or another piece of creativity. Pretty simple, right?
Are There Different Types of NFTs?
There are new kinds of NFTs on NFT marketplaces every day! When you think about it, it makes sense. If an NFT is, on a fundamental level, an entry in a decentralized ledger, then they can be anything you could conceivably put in a real ledger.
That means NFTs can be almost anything. Sure, some of the most famous NFTs have been artworks, but there’s no reason you couldn’t put films, games, and even stuff like houses and cars on the blockchain.
An NFT is no more and no less than a record of ownership. Anything you can own, then, could one day end up as an NFT.
That’s exciting news for NFT investors, tech-heads, and people who are eager to accelerate our course into the cyberpunk future we all know is coming.
Full steam ahead!
What Are NFTs and How Do They Work? Now You Know!
So there you go, everyone, a quick, clean, and interesting answer to the question: what are NFTs and how do they work? So many people have been very confused by the sudden rise of these techno-marvels, recently. When you drill down into the nitty-gritty of it, though, it turns out they’re not so hard to understand after all.
Now, get out there and go buy the Mona Lisa or something. It’s only a matter of time!
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