1. Quick understanding
NFT can be simply compared to a real estate certificate , replacing the house with various digital assets such as pictures, videos, and sounds, and replacing the paper certificate with decentralized digital certification, and it becomes an NFT. Owning an NFT means owning a certificate "corresponding to the ownership of a certain digital asset".
The earliest NFT cat raising game CryPtoKitties
2. Expand knowledge
1. Detailed explanation
The full name of NFT is Non-Fungible Token. It is a data unit on a blockchain digital ledger. Each NFT can represent a unique digital data and can be used as an electronic certification or certificate of virtual commodity ownership.
Non-Fungible Token translates as non- homogeneous tokens , which can be understood as tokens that can be replaced with each other.
For example, currencies in reality and bitcoins on the Internet are all homogeneous tokens, because your one dollar and mine, one of your bitcoins and one of my bitcoins can be exchanged with each other without distinction of. And each NFT corresponds to a specific digital item, such as a painting, a domain name, a game prop, etc., and naturally has the characteristics of irreplaceable, indivisible, and unique.
2. Opportunity
The emergence of any new thing is accompanied by certain opportunities, such as the previous Bitcoin . At present, the value of NFT can mainly be understood as investment in collectibles , which is determined by the digital data linked to it. But with the deployment of major companies and the constant influx of speculators, no one knows how the future will develop.
3. Risk
As an emerging thing with certain financial attributes, there are naturally various risks, a few of which are listed below:
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Compared with the limited amount of Bitcoin, the total amount of NFT can be unlimited , and anyone can upload and participate;
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While creators can sell the NFT representing the work, they can still retain the copyright of the work and create more NFTs belonging to the same work. That is, the buyer does not obtain exclusive access to the work, nor does it obtain exclusivity to the original digital file;
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People who upload a certain work as an NFT do not have to prove that they are the original author, and there have been many controversial cases where their artwork was stolen and used for NFT without the permission of the creator;
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The current main value of NFT is still investment in collectibles. Except for a small number of big players in the currency circle and early adopters, most of the main players are speculators. This determines that its market structure is somewhat similar to a pyramid scheme or a Ponzi scheme, where the profits of the first mover come from the investment of the latecomer. As someone said, "In the NFT trend, the decisive factor of value is not the NFT itself, but the consensus of the participants" ;
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Of course, security is also worth considering. Although the encryption technology of the blockchain is very strong, human consciousness is the weakest link. For example, in April 2022, Jay Chou posted on his ins that his boring ape NFT was stolen. More than 3 million yuan is because relevant information was entered on a phishing website. Moreover, the blockchain field is currently not protected by the laws of our country. Once it is stolen, no one can help you get it back.
