What is an NFT: concept and characteristics

What is an NFT: concept and characteristics – If you follow technological news, one of the questions you have asked yourself lately. It is one of the terms on which more has comment during the last months.

We are going to define it and try to highlight its main characteristics.

To clarify concepts, a fungible good is replaceable and can exchange for another.

They are goods that are exhauste with their use and cannot be The most straightforward example would be money.

On the contrary, non-expendable goods are those that are not substitutable. Works of art would be an excellent example since they cannot exchange as they are not equivalent to others.

NFT concept

The acronym NFT stands for “Non-Fungible Token” or Non-Fungible Token. It is a digital asset that cannot be consumed or replace.

When someone buys it, they are assigned a digital certificate of authenticity, recording ownership of a unique digital asset.

Blockchain or blockchain technology is use to register it, the same as that used in cryptocurrencies.

This technology allows the transmission of digital data in an encrypted and decentralized manner, which makes it secure.

By registering it, the authenticity of the acquired NFT is guarantee. That record contains the author’s data, the owner (the one who receives it), its initial value and the history of the transactions made.

Therefore, an NFT can be an image, a video, audio, text, or any other digital content that someone wants to acquire.

Main features

It is a digital asset

What is acquired is not something physical that can touch but a digital file.

It is unique

An NFT would be like a unique work of art, for example, a painting. These are usually digital illustrations, although they can take many different forms.

There may be replicas, especially in the case of something digital, but its registration assigns it a unique number, which guarantees its originality and authenticity.

Thus, the buyer can certify that he is the sole and actual owner of the original work.

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They are Indestructible

NFT data, stored using blockchain technology, is indestructible and cannot be delete or replicate.

They cannot divide

This feature differentiates NFT from cryptocurrencies; they have total value and cannot break down into smaller parts.

You Acquire full Ownership

When you buy one of these digital goods, it becomes yours ultimately.

We can cite some examples of NFTs that have sold for absolutely astronomical prices:

This is the case of some memes, the first tweet in history written by the founder of Twitter (Jack Dorsey), or a piece of digital art created by the artist Beeple, which was the auction at the prestigious Christie’s auction house.

These are just some examples of the revolution it has brought about in the cultural and art world, giving rise to unknown business models.

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Negative Aspects

Of course, there is also a negative side, such as possible plagiarism and fraud.

Its environmental impact has also been criticize due to the excessive energy consumption caused by its creation through blockchain technology.

Other negative aspects are the technical interruptions and sudden price changes, which can artificially inflate.