NFT is currently in hype or being discussed a lot in the crypto and digital worlds. What is NFT? Let’s study the explanation.
The current era of digitalization continues to develop rapidly. Likewise with fragments of blockchain technology.
Last year, there was decentralized finance (DeFi). This is a new financial method that adopts the blockchain system. DeFi has been loved by crypto enthusiasts around the world since last year. This year, blockchain development gave birth to the system At Indodax.Academy this time, we will discuss what NFT is.
What is NFT?
NFT or Non-Fungible Token is a token that cannot be replaced. Bitcoin and altcoins are coins, so NFTs are like digital certificates.
So, users only have an NFT with a record of digital asset ownership. The system is also supposed to be a blockchain-based certificate representing an asset ownership.
An NFT will have a unique code number and metadata. It will not be replicable. Certainly different from other NFT assets. The unique code can also track token issuance, transfer of owners and others. NFT-based cryptos are usually created under the Ethereum network namely ERC-1155 and ERC-721.
DeFi wallet services, such as MetaMask and platforms like Eos, Neo and Tron have also released their own NTFs. The goal is to compete with Ethereum to present crypto NFTs.
Use of the NFT System
Not only for crypto, the use of the NFT system is also commonly used outside of crypto projects. Lately, NFTs are more often used by musicians to sell song and video cassettes.
The NFT is an official copy that resembles an original asset. It is like a work of art like the many circulating song and video cassettes. While one original cassette is stored.
Of course, the price of the original cassette and the one in circulation is very different. And the tapes in circulation also have a slight difference in price. It depends on who sells it.
The difference between Fungibel Token and Non-Fungible Token
NFTs cannot be confused with Bitcoin and altcoins. Because Non Fungible Tokens are different from cryptocurrencies. Although both of them both adopt blockchain. Then, what are the differences?
Literally, fungible means “cannot be duplicated”. One example of a fungible is Bitcoin because it cannot be replaced and only 21.5 million BTC is in maximum circulation.
This is different from the NFT which is unique. If likened to the real world. Each item has its own replica shape. Such as paintings, pictures, songs and so on.
So, people can’t tell which works are original and which are duplicates. So with the presence of NFT, the authenticity of an artificial asset can be circulated officially.
Well, that’s a complete explanation of non-fungible token. Hopefully your insight in the crypto world continues to grow. Make sure you don’t miss other interesting information on Indodax.academy and Indodax social media!