How does NFT work?

What is the field of NFT? The word NFT is deciphered as nonfungible tokens. To understand this system, it is necessary to understand what environment the tokens exist in.

This is one of the most popular cryptocurrencies in the form of art objects. What is NFT, and why it was created below.

How NFT tokens work – NFT technology and types Several 

Ethereum ERC standards are used to develop the most irreplaceable tokens.

• ERC-721 is the first standard for blockchain oil tokens derived from the Solidity smart contract standard.
• ERC-1155 is a standard from the Enjin team with advanced functionality for ERC-721, which allows you to create both interchangeable and non-replaceable tokens.

 Among other blockchains on top of which you can create NFT, TRON has already been announced, which presents the TRC-721 standard, and EOS, which has developed a standard for the game Gods Unchained.

 Like other blockchain tokens, NFT is tied to a specific address and cannot be moved by anyone other than the direct owner. You can view your collections where you store NFT tokens – in the appropriate wallets, such as MetaMask.

THE ESSENCE OF NFT

 NFT (non fungible token) is a virtual certificate of ownership of each NFT project. It is used or added, for example, under images, gifs, etc. In this case, the object itself may be in the public domain. Usually, owners of NFT tokens have the right to work only, not the work itself. 

Tokens usually have links to an online copy of the object on websites or cryptocurrencies. Unfortunately, if the site closes, documents will not be saved. This is unclear to artists because the fate of the tokens is unknown. If you compare the token with the securities, it becomes clear that a similar option has already happened. For example, you can buy gold in bars or jewelry and buy it in protection. 

The same thing happens with works of art bought in the form of NFT tokens. Tokens are radically different, namely irreplaceable. For example, one dollar equals another dollar, and one gold bar can be replaced by another bar. But the NFT token cannot be returned. All tokens are unique and irreplaceable.

Which objects are most often converted to NFT

 As a rule, these are the author’s works:

•  music albums and individual tracks;
•  video;
•  paintings, images, gifs;
•  game characters and objects;
•  real estate object;
•  collection cards;
•  memes and even individual words and tags.

 The Nonfungible NFT portal conducted a study to determine which areas the non-replaceable token was most often used. The gaming industry (41%) and collectibles (29%) are expected to be in the first place. The study also included real estate (13%) and art (4%).

New NFT tokens in online games

In just a few years, NFT tokens have completely changed the world and the development of video games. Players often buy various gaming items such as CS weapons, Dota clothing, or characters in metarun. Creating irreplaceable tokens for such assets allows the internal gaming blockchain economy to function.

Developers and players understand that blockchain tokens will allow you to get real value from games.

The same principle applies to music concerts, sports matches, or movies. Any ticket issued in the NFT version makes it unique and individual, which completely defines the idea of ​​this system on the blockchain.

With the development of the NFT, the industry is standardizing property rights, various assets, etc. Assets have different market values.

What to do with NFT and where to start

What can be done with NFT? It can be created, sold, or bought. You will need an ETH wallet for these transactions. The easiest way to open a wallet is on the Binance exchange because this exchange is the easiest to buy and withdraw Ethereum and convert to another currency. You can buy ETH from any Visa / Mastercard, both for hryvnias and rubles. And most importantly, Binance launches its NFT Marketplace on June 26, 2021, where you can sell and buy your work.

 An ETH wallet will be required to register for all NFT projects. And to view projects such as games, lots, and collections, you do not need to have money in your wallet. You only need them when you buy or create NFT. The wallet will be required for registration at various sites.

Purchase and creation of NFT

To buy and create NFT, you will need ETH, in addition to the fee for buying or making NFT, you will also need to pay for gas, i.e., Ethereum commission.

Purchases can be instantaneous or auctioned.

To buy NFT, register on the exchange with your ETH wallet. Choose a business based on the NFT theme.

Creating NFT, i.e., its tokenization is called minting. Sites for creating NFT are higher. For example, on Rarible or OpenSea.

Conclusion 

This is an interesting time to get acquainted with the NFT economy, as the market is just emerging. Combine this with the fact that some projects have recently begun experimenting with NFT and Defi. Most likely, NFT will pick up the Defi hype and continue growing.

 Of course, the NFT sector is still relatively small compared to Defi, but the properties of NFT are already expanding the capabilities of creators in previously impossible ways.