What Are NFTs, And Why Are They Worth So Much
Many people often ask the question:
What Are NFTs, And Why Are They Worth So Much?
And particularly in 2021, this thing that is still unexplored to many people has become so popular.
Cryptocurrency, Metaverse, web3, and NFTs all belong to the same technology and are almost related to each other.
Whereas cryptocurrencies are something that people are familiar with even though their basics are difficult to understand.
But still, to some extent, it has become a common thing for people.
However, Nft is still very difficult to understand and how works.
In the article, I will answer all your questions regarding NFTs such as:
- What NFTs are
- How they work
- How and why they became so popular
I will explain to you the answers to all these questions today in a simple and easy-to-understand way.
The Background Of NFTs
When someone has money and becomes more financially stable, he starts doing many things that he never thought of.
And when his needs begin to be met, he goes after things that can only be called wishes and which do not appear in the list of needs.
Then he begins to put a value on various things which, on the one hand, are strangely impoverished, but which also indicate that man has become stable from the present taste.
NFTs are also among the things dubbed as non-fungible tokens. As an internet user, you may have heard of them.
Now the first thing is to know its literal meaning so that we know what this word means and why it is given this name.
What Are NFTS?
Non-fungible means something that cannot be replaced, that is, something else cannot take its place, especially in the same form.
A non-fungible token refers to each unique, special, inseparable, and indivisible token.
Let’s take a dollar for example.
If we both have a dollar each, now both dollars have the same value and we can exchange them with each other.
It would not make any difference because both have the same value.
In this sense, a dollar is a fungible object. Every dollar in the world has the same value and it doesn’t matter who is the owner of one.
Basically, your dollar is different than mine. At least its number and its paper are different from the one I have.
The reason it counts as the same thing is because the value it stands for is the same and that value is given by us.
So we count both dollars as the same due to their value.
Let’s dive into another example:
That will make it easier for you to understand this NFTs thing.
Suppose, you have Levi’s t-shirt, I also have a similar t-shirt of the same brand and the same size.
Now the value of both t-shirts is the same, I can give you my t-shirt and can take your t-shirt in return, there will be no difference in the value of both.
But now I manage to get the signature of Cristiano Ronaldo on my t-shirt. Cristiano Ronaldo signs on my shirt luckily.
Now the shirt I have has become non-fungible, unique, and special because of the sign of Cristiano Ronaldo.
It is not an ordinary t-shirt. It has a uniqueness and a value more than other t-shirts.
Why We Need NFTs?
While NFTs don’t just work to make things special, it’s more important to secure and ensure ownership of your digital assets that can be copied and duplicated very easily.
You own a game, music, image, digital art, domain, or anything else.
Now, what is the way to make it safe and protect it from someone claiming to be his own?
The transfer from the domain name provider still needs to be vetted because, as the consumer, we do not own the digital asset, even though we have paid for it, such as hosting the domain name.
For example, gaming items are hosted on the game service provider’s server. If the game service provider goes out of business, your gaming items will be lost and you will no longer own or have access to them.
You have to resort to a third party, which takes away your ownership.
As a result, we are dependent on a third party for our digital assets, so we do not actually own them.
Because they are under the control of the third company rather than being in our control.
This indicates that we need something or technology that will actually make us the nation of all our digital assets.
NFT addresses this very requirement of ours and allows us to truly own and control our digital assets, including purchasing and selling them.
How do NFTs work?
Now let’s come to how these NFTs work and what is the technology behind them and how it is made
NFTs also work with blockchain technology like bitcoin and this is its basis.
Blockchain technology creates a digital certificate for your digital assets, including music, photos, games, and the like.
This digital certificate gives a unique identity to your digital assets.
Just as the entire record of a cryptocurrency is stored on a blockchain and cannot be tampered with because of this blockchain, the ownership record of an NFTs is also stored on a blockchain that is immutable and stable. The authority to sell also belongs to the owner which is stored in the blockchain.
Why Are NFTs Worth So Much?
Anyone can make NFTs, but their popularity increased when some of the NFTs sold at a very high price.
These were covered in newspapers and channels around the world.
Because of this, people are attracted to NFTs to understand them and make money from them.
And that is why it is becoming popular because it gives you full and secure ownership of your digital assets.
Now, when someone creates a kind of art, game, or music, there will be no problem with its ownership
And you can secure it by making it an NFT.
.What Are The Most Expensive NFTs Sold?
- Pak: “The Merge” (Sold for $91.8 Million).
- Beeple: “Everydays: the First 5000 Days” (Sold for $69.44 Million)
- Pak x Assange: “Clock” (Sold for $52.7 Million)
- Beeple: “HUMAN ONE” (Sold for $28.9 Million)
- Larva Labs: “CryptoPunk #5822” (Sold for $23.7 Million)
- Larva Labs: “CryptoPunk #4156” (Sold for $10.26 Million)