What is NFT and what is its value?

digiXnode
4 min readDec 5, 2021

This is the original 1500th issue of Vernacular Blockchain | Author Joyce | Produced by Vernacular Blockchain (ID: hellobtc)

​​The blockchain games that are gaining popularity recently are, to be precise, a subset of the NFT section. So, what exactly is NFT?

01 What is NFT?

The full name of NFT is Non-fungible-token, that is, a non-fungible token, which corresponds to FT (homogeneous token). Non-homogeneous Token refers to a uniquely identified, non-interchangeable Token, and it cannot be split.

It sounds more abstract, let’s talk about homogenized tokens: for example, Ethereum, Bitcoin, etc. I have a Bitcoin and exchange it with one of your Bitcoins. It does not affect its value at all. What I own is still a bit. currency. Just like the 100 bucks in my hand and the 100 bucks in your hand are interchangeable (if you don’t consider the above coding inconsistency).

But if I have a concert ticket in my hand, I may not be willing to exchange for a concert ticket in your hand, because the position of my ticket and your ticket must be different. My ticket may be in the front row. Yours is in the last row. The seat number is written on the ticket. There is a clear difference between the two tickets.

NFT is similar to concert tickets, each is unique. Moreover, unlike Bitcoin or Ethereum, it can be divided into 0.1 or 0.01. NFT is indivisible. It’s like a concert ticket, if you get half of it, you can’t enter the venue. So, what is the use of NFT?

02 The value and application scenarios of NFT

We know that the Internet is a world where information can flow freely. Information such as text, pictures, or videos can be instantly transferred to any corner of the world via the Internet. It can be said that the Internet has greatly subverted people’s lifestyles.

However, when these texts, pictures, and videos are transferred, the copies are transferred, and the originals are still stored locally. After a picture has been circulated on the Internet countless times, who can tell which is the original and which is the copy?

Because NFT has the characteristics of unique identification, the text, pictures, and videos loaded with NFT are equivalent to having a unique identification in the digital world.

No matter how many copies of this information are copied, the one with the NFT ID is the original. Moreover, NFT is based on the underlying technology of blockchain, which allows information with NFT to be traded freely without the need for intermediary giants.

Blockchain is called the “Internet of Value” because it complements the last piece of the Internet and solves the “double-spending problem” of transactions without the need for a third-party intermediary. NFT is currently the “Internet of Value”. A shining pearl on the wall.

So, where is NFT specifically used?

There are many application scenarios for NFT. Like the NFT digital artwork auctioned by Christie’s, the artwork itself is based on blockchain technology. NFT stands for the work itself. The NFT token is transferred from the seller’s wallet to the buyer’s wallet, and the buyer completes the payment. , Which means the end of the transaction.

NFTs like this include encrypted game assets (such as the smashing crypto cat in 2017 and the current game AXIE), encrypted collectibles (NBA Top Shot’s highlight moment video NFT of NBA stars), etc., which can be derived into finance in the future Derivatives, personally identifiable data, etc.

Of course, in addition to these native encrypted assets (NFTs developed based on blockchain technology), some physical assets issue NFTs, such as physical works of art, real estate, and other physical assets. These NFTs are just an online transfer identity Evidence requires a third-party intermediary with a high degree of credibility in the real world to provide arbitration witness to ensure that the NFT can correspond to the corresponding physical assets.

Another type of existing Internet assets, such as domain names, also requires third-party giant institutions to provide relevant certification information so that NFTs can correspond to the corresponding assets.

03 Summary

In short, NFT, as a hot new thing, has quickly emerged from the circle and has become the focus of more and more people’s attention. Although “the artistry of NFT auction items is too low”, “NFT is a total bubble” and other comments are endless, the emergence of new things must be accompanied by huge controversy.

We do not deny the existence of bubbles but believe that the true value of NFT will gradually become apparent after the bubbles are squeezed out one after another.​​​​

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