Non Fungible Tokens (NFT) Explained
What Are NFTs?
Non-Fungible Tokens (NFT) are digital assets such as collectibles, gaming, art, and virtual assets with proof of ownership permanently written on the blockchain.
The NFTs can also be exchanged over blockchain platforms and and special websites called NFT Marketplaces.
NFTs come with unique digital signature that designate ownership of the said asset.
NFT’s leverage innovative smart contract technology to store and record unique information on the blockchain, this simply means that NFT’s are unique to each other, whenever an NFT is created only one of it verifiably exist and this give it an ideal functionality that can be used to certify an asset authenticity.
NFTs are also generally one of a kind, or at least one of a very limited run, and have unique identifying codes.
How Is an NFT Different from Cryptocurrency?
Similar to cryptocurrencies, NFTs are issued on blockchains, Each NFT comes with its unique digital signature which allows owners to prove ownership as well as the authenticity of the NFTs.
NFT’s are tokens just like any cryptocurrency difference being that an NFT is unique and can’t be traded for one other, they are built using the same kind of programming as cryptocurrency, like Cardano or Ethereum, but that’s where the similarity ends.
Fiat currency’s and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another.
They’re also equal in value and can be interchanged for each other and still retain the same value, one BTC is always equal to another Bitcoin.
NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible).
What Can Become An NFT
Virtually anything can become an NFT, it could be Text, music, pictures, videos, 3D-models, artwork, collectibles, in-game purchases, domains and any other item can become an NFT, as long as we can store data on the blockchain, this stored data can reference anything such as certificates, houses, shoes, artworks etc. this is the fundamental idea behind NFT’s.
Since we can reference an assets data on a Blockchain we can also tie this assets with an NFT on the blockchain thereby creating a decentralised and trust-less manner of ownership and assets ownership transfer.
NFTs are steadily gaining popularity and would soon be mainstream because they offer a unique ownership of any asset in a Decentralised and Trust-less manner.
Marketplace’s for digital assets are springing up daily across multiple blockchains because of widespread adoption and utility with artistes creating and selling songs and merchandise as NFT’s and even companies creating their own NFTs as part of their marketing mix.
Besides these NFTs allow users a flexible way to store, control, and protect the information related to their identity. NFTs creatives can also receive royalties from their NFTs and receive a percentage of future sales of their NFTs.
How do Non-Fungible Tokens Work?
NFT’s work by transforming a digital asset and other collectibles into a one-of-a-kind, verifiable digital asset that can be traded on a secondary NFT Marketplace.
Many NFTs come with their own unique meta data, including ownership and transaction details stored under its smart contract. NFT creators can also add details to their NFTs such as the creator’s identity, secure links to files, and more during transactions.
What Are NFTs Used For?
One can’t deny the utility NFT’s present in todays world, a lot of artistes have been able to monetize their works through the use of NFT’s.
The emerging technology of blockchain and NFT’s possess a lot of limitless potentials, artistes do not need to rely on galleries and auction houses to sell their arts, there is now more connection between the artiste and the buyer without the need of a middle entity, by selling and dealing directly with the consumer, artiste gets to keep more profits to themselves and ultimately wouldn’t have to wait for an auction or exhibition.
NFT’s are also made with some contracts in such a way that creators can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner, this also gives the creator some form of control or over their creations.
This is an attractive feature as artists generally do not receive any form of royalties after their art is first sold.
However selling arts or digital images isn’t the only way NFT’s are use, they can be used in numerous ways like asset authentication, value transfer and so many other use cases.
Why Are NFTs So Valuable?
NFTs are digital assets that represent a virtual or physical asset in the form of a unique token with verifiable proof of ownership.
1: Ownership: The ability of NFTs to assign publicly verifiable ownership to digital assets is a game-changer in the collectibles market. With blockchain technology, the authenticity of artworks, collectibles and any real world physical asset is guaranteed.
2: Scarcity: NFTs establish digital provenance, which is a way to create scarcity, consequently adding to the perceived value of these one-of-a-kind digital assets.
3: Potential Profitability: NFTs have real potential to enrich issuers and collectors. As they operate on smart contracts they can reward creators with a cut on all subsequent sales. Conversely, collectors could potentially earn substantial returns as the popularity of their NFT collection increases.
As OpenSea acts as the backbone of the Ethereum NFT marketplace, Digirack is on a mission to build a similar Cardano NFT API that would allow developers and brands to easily pull from our data sources and list NFTs across multiple platforms.
Currently there are no NFT APIs available on the Cardano Blockchain.
This will allow wallet providers to “list” NFTs on their native Dapp using white labelled Digirack data.
Rack Tokens are required to be staked in order to pull data from our API system.
What is Digirack?
Digirack is a decentralized Marketplace being built on Cardano where creators can mint and sell their works as NFTs on an online marketplace built utilizing blockchain technology.
Join the Digirack Whitelist Contest for a chance to be selected to join in the Highly Anticipated Digirack Token Pre-sale.
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