What Is NFT And What You Need To Know?

What is NFT? How do non-fungible tokens work? What is the future of NFTs? Get to know the basics of NFT right now.

My 20-year-old son asked if I knew how to create an NFT.  You might want to know why he would ask his 58-year-old mother this question and that’s a good question.  I, in turn, asked him what is an NFT. He said: NFTs are like art that's being sold for money and something about Facebook is now a metaverse.  So, I had no clue what he was talking about, and I figured maybe you would like to know as well.

NFT stands for non-fungible token. When I first heard the term “nonfungible token”, I was like: ‘Fungible? Non-fungible? What is that?’ In this post, we will learn about NFTs, what they are, and what you need to know.

What is an NFT?

In economics, a fungible item is not unique, and it is replaceable.  For example, a 1$ bill is equivalent to any other 1$ bill and is used in every transaction that requires $1 as payment. Nonfungible is the opposite, the item is unique, and not replaceable. You can go so far as to say something that is “one of a kind."

In the wonderful world of new, everchanging, updating, and upgrading technology, an NFT is a type of digital asset that is unique and one of a kind.

How to create an NFT?

Just so you know, this is about digital art. A picture, a design, a model of something, a video, or a tweet gone viral. An NFT can represent almost any type of creative or artistic project. There are no limits to this form of digital art, like the Charlie Bit My Finger video or any one of these pieces of creative art, or the tweet from Jack Dorsey, creator of Twitter.

So, just how to create this form of digital art is the artist’s choice of tool, whether an application like Adobe Illustrator is used or a camera on your phone the art is created first as a unique, rare piece of digital art. Then the digital certificate claiming you created this rare piece, and that it is one of a kind, is now "voila!" an NFT. 

How do NFTs work?

Speaking of digital certificates (tokens), this is how to verify the art created is original, by the original owner or creator and that it is considered authentic. Who or shall I say "what" verifies the authenticity? Something called the Blockchain! Where lots and lots of transactions are taking place using digital money or something called “Ethereum Cryptocurrency.”

So, you buy into this crypto world where you can then upload or create your digital art, and then this piece of art is seen as a transaction, then verified as unique and original, once approved by all the connected computers in this crypto world, this digital art is now an NFT (non-fungible token) with some value on the Blockchain. You might want to know what these NFTs look like and where to find them.

Where can I find NFTs?

There are marketplaces to create, buy and sell NFTs. Here are a few for you to check out, OpenSea, rarable.com, and crypto.com, also check out this article “The Year of the NFT” to learn more.

NFTs and the Future

What is the future of NFTs? As you can see, NFTs bring something new to the table and the technology behind the hype is real. They’re an intriguing tool and one that is emerging as a popular trend. It remains to be seen how prevalent NFTs will become since we cannot predict the future with any certainty, but the nonfungible aspect of these tokens allows creators to be more innovative with their products.

What we can say is that the technology and verification of transactions behind “Blockchain” just might change and improve the way financial transactions are processed in the future. This is a lot to process at one time, so stay tuned for more. What's a “Blockchain?”