What is NFTS: Non-fungible tokens and how they work

It was in 2020 when NFTs captured the attention of people around the world. The crypto games and digital art found in this technology a new way to authenticate and generate incomeAnd although its popularity has declined somewhat since then, it still has a wide field of application in other sectors.

What are NFTs? Essentially, They are the digital version of unique and irreplaceable goods such as works of art, jewelry or stamps.With this technology, it is possible to digitally represent ownership over unique items. Below, we explain in detail what NFTs are, how they work, and how they are used in the modern digital age.

What are NFTs? Non-fungible tokens and how they work

The acronym NFTs stands for non-fungible token, or non-fungible token. A token It is a digital representation of an asset or right, which operates within a blockchain, or Blockchain. And the adjective 'non-fungible'' means that something is unique and cannot be replaced.

Therefore, NFT files They are irreplaceable digital assets that have unique characteristics and an assigned value.These assets can range from photos or videos to illustrations, trading cards, social media posts, and website domains. The act of digitally representing an asset is known as tokenize o coin, a procedure that can be carried out from different platforms and that allows anyone create an NFT.

Now, What does it mean for these digital assets to be non-fungible? To understand this, we can compare them to a work of art, such as a painting or a sculpture. There is only one Mona Lisa, or a Venus de Milo, and they are found in a specific art gallery. Although copies of these works can be made, they would never have the same value as the originals. The same goes for NFT files: they are unique, indivisible and irreplaceable assets, but in digital environments.

How do non-fungible tokens work?

How do you turn a digital file, which can be easily copied, into a unique asset? This is made possible by the blockchain technology, or blockchain, the same technology behind cryptocurrencies. This technology works as a decentralized digital ledger made up of global data distributed across computers around the world.

In other words, NFTs They are digital assets that use blockchain technology to verify their authenticity and ownership.Using this registration system, it is possible to create and assign a kind of digital certificate of ownership to a particular file. This certificate consists of a set of codes or metadata that are associated with the file, identifying it in a unique and unalterable way.

In addition, the metadata associated with the digital file indicates who its author is, its initial value and all the acquisitions that have been made of it. In this way, the authenticity of the asset is guaranteed and a detailed record of its whereabouts is kept. Because of the way blockchain technology works, there is no way to modify or duplicate an NFT file, making it impossible to counterfeit..

Features of NFTS files

In order to better understand what NFTS is and how these files work, it is useful to isolate its most relevant characteristics. In this way, you can get a clearer idea of ​​the potential of this technology and the multiple uses it could receive.

• Each NFT is unrepeatable and cannot be duplicated, which is why it is used to identify works of art in the real world.
• Since the data of an NFT is stored on the blockchain, these files are permanent and indestructible.
• They are not divisible either, just like cryptocurrencies, which can be divided into smaller parts. Thus, NFTS are bought and sold as a complete unit.
• When you acquire a non-fungible token, you get the full ownership of the digital asset, even though the file can be copied.
• Transactions with NFTS are publicly recorded, allowing for a clear follow-up of ownership and authenticity.
• NFTs can be used on different platforms, as long as they are compatible with the token's features and encoding.

What uses can be given to NFTS files?

As we have already pointed out, one of the main uses that NFTS assets have received is related to the Digital art and crypto games. Companies and individuals took advantage of the NFTS boom during 2020 to sell collectible digital pieces. Some of these files were worth millions of dollars, just for being unique and unrepeatable.

For instance, the NFT file of the first tweet in history was sold for a sum of more than 2,9 million dollars. Another example was the video game CryptoKitties, where participants could buy and sell collectible virtual cats (non-fungible tokens) for hundreds or thousands of dollars. Likewise, the games play-to-earnas the Axie Infinity o Plants vs. Undead, They allowed NFTs to be used for gaming and, at the same time, to accumulate cryptocurrencies.

Today, enthusiasm for NFTS files has diminished considerably, although their potential is still being exploited in other fields. Such is the case of the use of these files for manage and transfer property rights over physical or digital assets. Smart contracts are used to achieve this, allowing for the automatic and decentralized execution of agreements when certain conditions are met.

Conclusions

In conclusion, we can say that NFTS files are digital assets that use blockchain technology to verify their authenticity and ownership. Since they are non-fungible files (unique and irreplaceable), they are used to represent original real-world items. This has allowed many creators and artists to use them to monetize their work in a more efficient way.

Given the very particular characteristics of NFTs, It is to be hoped that their advocates will find further fields of application for them.. We can only wait to see how far it can reach other sectors of society. What is certain is that this is a revolutionary technology that will take time to gain ground and acceptance, even in today's modern world.