Introduction
What Are NFTs | Non-Fungible Tokens?
What is a token? what is blockchain?
Friends, if you are actively involved in this world, spend your time on Twitter, Instagram, Linkedin, Youtube, then you would have heard of something called NFTs. The full form of NFT is Non- Fungible Token, There are two key terms in the non-fungible token. Non-fungible and token. Let’s start with non-fungible. Once you understand what NFTs are, you’ll also need to learn practical aspects, such as how to correctly transfer an NFT to another wallet, to fully participate in the NFT marketplace.
What Are Non-Fungible Means?
If I would have to simply express it then, to replace the word fungible, I would use the word replaceable. This means non-replaceable. let me start with an example imagine I have the book in my hand now, this is a book that there are millions of copies of this book because this book has been mass-produced, so every copy is the same, that means if you buy a book from amazon on day one, and then if you go to an offline bookseller and buy another copy on day 15, there will be no difference between the two copies, they will be at the same price and that’s why you have got the same copy. That means that this book is replaceable.
You can replace this book with any other book at any point in time, and that makes it a replaceable asset. but his book in my hand is unique. why is it unique? because I have read this book, no that’s not the reason for it to be unique, I am not that capable.
while reading I have highlighted many things in this book I have put in a lot of posts -its, which means this particular copy, this one copy in my hand is not replaceable.
you cannot buy this particular copy. from anywhere else because it has my notes, my highlights, my scribbles, and that makes it non-replaceable.
this book is only one of its kind. and now you can use that for anything possible, right? you can imagine a bike or a car that has only one unit or is manufactured in a limited edition which is very different from the mass-produced cars that there are you can imagine a specific bottle, a specific calendar, a specific image, or it could be anything, something that is unique and that is not replaceable.
What Are Token Means?
Now let’s come to the concept of the token. What is a token? all that a token reminds me of is mother dairy. we had to buy tokens to purchase milk when we were kids, and then we used to insert the tokens and fill a bucket with milk!
and I remember, kid you not when I was a kid I used to think which is what my parents told me! when you insert the token, the cow starts giving milk and I was like, wow! this is a miracle! I can just insert a token and get the cow to give milk!’
anyway back to this article what are tokens?
The token is riding on something called blockchain let me try and explain what is the meaning of blockchain and thus what is the meaning of a token? suppose I buy an item from you, let’s say I buy a book from you, ok? though this one is not ₹100 and you are a shopkeeper. I come to your shop and tell you that I want to buy this book you say it is for ₹100
I scan your UPI with my phone,₹ 100 flashes on my screen, I enter my UPI pin, and you get ₹100 now, this transaction was very easy but what all happened in the background?
When I scanned it and entered the pin to pay ₹100 in that mini seconds my bank checked whether I have ₹100 or not, and if I have then they would approve the transaction. when the transaction got approved, those ₹100 were transferred to your bank, and your bank registered you received ₹100 from someone, and this entire transaction was recorded. but all of this is happening at a bank level. so the bank is keeping a record of every transaction that is happening at your end because you have a bank account there, this is called a centralized way of banking
Secondly, money as such is unlimited. the money that we have is just a piece of paper. Government can print it as many times as they want and they have done but the truth is that the value of your money can reduce at any point in time because a lot more money has been printed or just as it happened during demonetization,
The note or the currency itself is disregarded, somebody decided to void it overnight. that is what centralization is. it is great because only one person is founding all the rules and regulations, but it is also not so good because that one particular person has a lot of power, that need not be an individual, it could be an institution, an organization, or a collective, but that is how it is.
Now someone in 2009 and this someone is Satoshi Nakamoto. Nobody knows who he is, and in that paper, he said can we transform this centralized world? this means if I gave you ₹100 to buy this book, then a ledger was created can that be a public record? this means it is not bank-owned but is publicly owned.
and that is the concept of blockchain. when I give you ₹100 not rupees but 100 tokens and the token is just the name for currency in the blockchain world. if I give you 100 tokens, then someone first has to check whether I even have 100 tokens or not. who is that someone? it’s not one person or one institution, it’s the entire world theoretically. thousand of computers that are spread across the world will simultaneously check whether I have 100 tokens or not.
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If I would not have, then it would say transaction disapproved, and a record will be created for the same. if I would have, then it would say transaction approved and my 100 tokens will be transferred to your account, and that transition will be recorded forever and ever. nobody can move it, nobody can erase it, and that is the concept of blockchain.
The Connection Between Blockchain And NFTs
Now how is this concept connected With NFT?. Let’s come back to this book again. suppose I have this book in my hand this is a special book. This book has my highlight, my notes, and that is why there is only one of this kind. if I would want to sell this book and you would want to buy this book because that is the cost of the book, let’s say I would sell it for 1000 if you want to own this, there has to be a way to prove that you own this now this is a physical book, but he at if it was an image? what if it was a movie clip? what if it was a poster?
what if it was the song? then how do you prove the ownership of that tone unique piece? it is by creating an NFT. that is how NFTs Work. they are a legitimate way to transfer ownership of digital items even physical items, and in such a way that your ownership will always be o the record it would be proven, and it can never be edited or deleted.
I Hope that this article will help you to understand the concept of NFTs. If yes then please share this article with your family and friends Thank You.
EXPLORE GAMER
