The legal system involves two terms related to the presence of consumable and non-exhaustible goods . The former can be changed and depend on factors such as weight, size or number. While seconds are irreplaceable and retain their value. Such is the case when creating and selling NFT or tokenized content that you will learn about below and that are so popular on the internet.
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- What are NFTs or Non Fungible Tokens?
- What are NFTs used for?
- How do Non Fungible Tokens work?
- Most relevant characteristics of the NFT or Non Fungible Token
- It is an asset that never changes state or loses value ‘Non-fungible’
- All NFTs are singular and unique
- They are indivisible
- Where are Non Fungible Tokens or ‘NFTs’ stored?
What are NFTs or Non Fungible Tokens?
NFT stands for ‘Non Fungible Token’ and refers to units of value that are assigned to certain models such as cryptocurrency. This type of goods is related to Internet elements that can be digitized after taking good photographs, creating works of art, illustrations, memes, among other options in the buying and selling market.
Therefore, these are assets with a digital certificate that cannot be compared, exchanged or consumed after use. The NTFs use blockchain technology and present an unrepeatable or unique cryptography, using currencies such as Ethereum as payment. Therefore, a person who acquires a non-expendable property can be sure that he is the sole owner.
What are NFTs used for?
Although some think that NFTs affect the environment , these digital assets have many advantages. They are used with the aim of generating a legal certificate of ownership intended for a buyer in its entirety.
In addition, it is possible to trace in order to know who is the creator of these assets. It is important to note that users have the power to buy and sell objects to acquire all the rights and credits of them.
How do Non Fungible Tokens work?
NFTs work with blockchain technology. In this sense, a centralized network of computers with nodes linked to each other through cryptography is used. Each of them contains a date and other transaction data. Indeed, it is unlikely that the “authenticity” information can be modified .
Typically, a person creates the object and tokenizes it via NFT. Then, proceed to sell the item on the network. In this way, the work becomes an individual component and the owner is registered through a smart contract. In this step, the owner obtains all the information about the property that he purchased.
Most relevant characteristics of the NFT or Non Fungible Token
NFTs have a group of outstanding attributes that attract buyers and those interested in buying and selling. Two of them are authenticity and its unchanging nature. In addition, singularity and uniqueness are common features, as well as their indivisible factor. It should be noted that the scarcity of these assets makes them objects that are only registered once on the network.
It is an asset that never changes state or loses value ‘Non-fungible’
Unlike other types of assets, non-exhaustible assets do not change their nature or change their value. When the buyer or collector acquires the rights through the contract, unalterable properties are defined that cannot be destroyed. For this reason, many people decide to make the investment in NFTs because after a while they stipulate to sell them at a higher price.
All NFTs are singular and unique
Particularity and authenticity are two frequent attributes of these digital goods. Thanks to their metadata, it is possible to distinguish all the components that define them. Thus, they provide greater confidence to their owners. The protection of exclusivity is a value that provides originality and interest for the acquisition of these assets.
They are indivisible
It is not possible to split NFTs, which is why you cannot choose to buy a part or get full units if you see fit. This condition differentiates them from other cryptos, since most can be bought in parts. That is, it is not necessary for users who do not have enough money to acquire the complete good.
Although the tokens have positive aspects that attract many people, it is also true that there is an exposure to volatility. For this reason, there may be risks when making investments . In this regard, the rises and falls of the value are frequent, as is the case with Ethereum or Bitcoin. This leads to gains and losses in a short period of time.
On the other hand, it is fair to point out that the world of NFTs is diverse , in fact, investing in Axie Infinity is an extension of this new trend. In turn, it is possible that over time other proposals will arise that further extend the nature of these tokens.
Where are Non Fungible Tokens or ‘NFTs’ stored?
NFTs can be saved on any website. However, in the event of a URL failure or page location removal , you will lose your metadata. To avoid this problem, access to Metamask would be the solution, since it is a software wallet to protect tokens. There, we assign a key and secure each transaction.
As with the dollar or any other currency, the use of wallets is not infallible, since hackers have discovered various accessibility strategies. For such a reason, administrators must prevent hacking or take advantage of interplanetary file systems . This alternative facilitates the creation of an unalterable identification code that is associated with the NFT.
There is another much safer way to deposit any type of NFT. It consists of using a hardware wallet which is responsible for storing the content online. This allows you to add an additional level of security thanks to the creation of a password, essential for the collector and the average user.