What are NFTs?

By Srabon Nath

NFTs seem to be the next big thing nowadays. Everyone is either talking about it or

making fun of it. But what is an NFT? Quite literally an NFT stands for “non-fungible token”. A

non-fungible token simply means that it is a unique thing that only one can exist. A dollar bill

is not non-fungible because there are many dollar bills in the world. But something like a

painting, the Mona Lisa for example, is a non-fungible token since you have only one of it in the

world.

But why are NFTs important? Since they are unique, they have a lot of value and can be

bought or sold. While something like a very famous painting makes sense to be worth millions of

dollars, some NFTs can be as nonsensical as digital perfume. Basically, anything that is digital

can be called an NFT and can be owned by a person/organization. Something ironically strange

about digital NFTs is that they really aren’t unique. You can download, screenshot, or save a

digital artwork on the internet and no one can do anything about it. So in reality, when you buy a

NFT, you aren’t buying the NFT itself but rather the ownership.

The worth of a particular piece of NFT depends on its demand. This means that the price

of NFT that you bought for five dollars could be worth thousands later on. Most NFTs are part of

the Ethereum Blockchain. Understanding how that works would require a great understanding of

cryptocurrencies. But in simple terms, the Ethereum Blockchain is used to record the transactions of NFTs. So even if there are hundreds of copies of the NFT you own, the reason that it is an NFT is because of that transaction made through Ethereum.

NFTs have exploded very recently. There are many uses of this concept of owning digital

objects. Some artists make their art into NFTs so that they can create art for their enjoyment and

also profit off it. And people can buy these NFTs from the artists so that they are able to support

creators. Some people buy NFTs in hopes that the value of the NFT increases over time and they

are able to sell it back for a profit. Some wealthier people collect expensive NFTs. There are

even communities that were made for the purpose of selling, buying, and discussing NFTs. In the

end, there are many creative uses for NFTs.