What is NFT technology that moves millions of euros and how does it work?

To unravel and understand the basic guidelines of NFT technology , it is not enough to point out that its acronyms correspond to the acronym “ Non-fungible Token “, by its name in English. For William Mougayar, author of the book ‘The business blockchain’, the term “Token” in the digital economy refers to the “unit of value that an organization creates to run its business model”. These units have digital transfer registration number codes that guarantee their owners complete authenticity. An NFT Markeplace Development services has no useful function beyond its treatment as a collectible item., since you cannot interact with them, only transfer them, and unlike cryptocurrencies such as Bitcoin, they are not interchangeable with each other.

A non-fungible Token is irreplaceable

To take it to a minimum, each NFT is the specific and individual representation of “something real or fictitious” with an encrypted certificate of authenticity and cannot be replaced . Unlike a bitcoin, for example, which can be exchanged for another bitcoin and you get exactly the same thing, a non-fungible token, that is, a unique image, video or audio file, cannot be exchanged by itself. Therefore, it could only be replaced by a different single image, video or gif.

The latest trends are promoting a market derived from the video game industry that allows NFTs that provide unique certified items for a certain title, such as a weapon or a special type of clothing, etc. Virtually any digital item can be turned into an NFT , though its greatest popularity currently revolves around digital art that can be reproduced virtually.

This is the basic concept of the technology behind Non-Fungible Tokens: a signature that turns any type of digital piece: video, photo, messages, audio files, etc., into a non-fungible asset . Now, while NFTs are designed to be irreplaceable, the artist retains copyright and reproduction rights to the physical format. For example, anyone can buy a reprint of a photograph taken from any work of art, but there is only one person/entity in legal possession of the original image and its rights.

Under this concept it is common to find virtual elements of video games, such as weapons and unique avatars; Artworks; Music; audio files, collectible images; videos of iconic sports moments and real tokenized assets ranging from real estate and luxury vehicles to watches and fashion items .

Transactions are made through Blockchain

Although it may seem somewhat confusing, last year NFT technology continued to rise as one of the fastest growing trends in the cryptocurrency segment. It has gone from moving around 250 million dollars in sales in 2020 to 389 million last year. And the trend continues to rise. This robust technological relationship between data and values ​​in NFTs is made possible by a technology called Blockchain . It is a decentralized database famous for serving cryptocurrencies such as Bitcoin and Ethereum.

Blockchain is a shared and immutable ledger of Bitcoin blocks that allows tracking the receipt and sending of information where all transactions are recorded in a public document . Given the decentralized nature of the blockchain, the margin of security of the stored information, also tamper-proof, fosters an ideal environment for the proliferation of the NFT market taking advantage of many cryptocurrency mechanisms.

The other big question: How do they work?

Basically, any digital element that its owner deems necessary to attribute authorship, can be linked to an NFT as a way of certifying its character as an “original piece” with an eye toward commercialization. In other words, anyone can create an NFT or thousands, practically everything in the digital environment can become one . Taking a photo in digital format is within the reach of anyone with a mobile phone and converting, for example, that JPEG file into a piece for the virtual market is simple . However, no matter how favored you appear in the image, this does not guarantee that once converted into an NFT Marketplace Development item it will have any market value.

First it must be launched on the market where it will be bought and sold. If you are the creator of an NFT, you can lock in a percentage of the transaction each time it is sold or changes hands . Thus, the higher the popularity, the more value the non-fungible Token will add. If you have decided to try your luck, you should try among several of the organizations that move around NFTs, which allow buying and selling such as OpenSea, Rarible, Nifty Gateway and others .

A business trend that is here to stay

The NFT marketplace does not stop and we have already seen big brands like Marvel and Nike launch their own collections, although in these cases the items seem to be more aimed at collectors than lovers of virtual art or cryptocurrencies. In any case, Non-Fungible Token buyers add value to original and unique virtual items. Therefore, the fact that articles sometimes reach such high figures corresponds precisely to their exclusive and registered nature as such. The difference with traditional investments and, for example, with the buyer of a painting, is that you do not have the painting, but we cannot forget that we are talking about unique digital files .