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Tracing What is NFT and Its Use

Liputan6.com, Jakarta Non-Fungible Tokens or NFTs are currently popular digital assets both as collectibles, investments, and even NFTs have benefits that can be realized in the real world.

So, what exactly is NFT?

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NFTs are a kind of non-fungible token, usually found in blockchain technology. Even though it has been around since 2014, the popularity of NFTs will increase from 2020 to 2021. After that, more and more people are interested in making NFT transactions on various platforms.

According to CNN, NFTs are pieces of digital content linked to a blockchain, or a digital database that also underpins cryptocurrencies like Bitcoin and Ethereum.

The difference is that crypto assets such as Bitcoin and Ethereum are interchangeable, meaning that they can be replaced or exchanged for other assets that are identical with the same value, such as dollars.

Meanwhile, NFT is a unique asset and cannot be exchanged, or in other words, no two NFTs are the same. NFTs create scarcity among the assets available without limit, there are even certificates of authenticity to prove it.

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NFTs are typically used to buy and sell digital artwork and can take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate and more.

How NFTs Work

NFTs exist on the blockchain, which is a distributed public ledger that records transactions. You are probably most familiar with blockchain as the underlying process that makes cryptocurrencies possible.

In particular, NFTs are usually stored on the Ethereum blockchain, although other blockchains also support them.

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NFTs are created, or “printed” out of digital objects that represent tangible and intangible goods.

Basically, NFTs are like physical collectors’ items, only digital. So instead of getting an actual oil painting to hang on the wall, the buyer gets a digital file instead.

Get Exclusive Rights

NFTs can only be owned by one owner at a time. NFT’s unique data makes it easy to verify ownership and transfer tokens between owners.

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The owner or creator can also store certain information in it. For example, artists can sign their artwork by including their signature in the NFT metadata.

Not long ago the former US president, Donald Trump sold his NFT collection, for some of their owners got the opportunity to have dinner with Trump as an exclusive right.

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Uses of NFTs

Blockchain and NFT technologies provide artists and content creators with a unique opportunity to monetize their merchandise. For example, artists no longer have to rely on galleries or auction houses to sell their art.

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Instead, artists can sell them directly to consumers as NFTs, which also allows them to keep more profits.

Additionally, artists can program in royalties so that they will receive a percentage of sales each time their art is sold to a new owner.

This is an interesting feature because artists generally receive no future proceeds after their art is first sold.

Art isn’t the only way to make money with NFTs. Brands like Charmin and Taco Bell have auctioned themed NFT art to raise funds for charity.

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Apart from that, currently many music event promoters and airlines issue tickets in the form of NFTs. This is used so that NFT owners do not need to continuously buy tickets for concerts held by the promoter.

Disclaimer: Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. Liputan6.com is not responsible for profits and losses arising from investment decisions.

Tracing What is NFT and Its Use

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