An NFT (Non-Fungible Token) is a unique digital asset that can be uniquely identified, and cannot be copied or replaced. It is recorded on a blockchain, which makes it easy for everyone to certify its ownership and authenticity.
Cryptocurrencies use similar technology, but they are “Fungible,” which means all coins from the same currency are identical and can be exchanged or replaced. For example, 1 bitcoin is the same digital asset inside every digital wallet.
The uniqueness and verifiable authenticity of NFTs recorded on the blockchain is achieved through cryptographic properties: an NFT is created by taking a set of organized data (a large sequence of 0s and 1s) and applying a hash function. This transforms the data in such a way that, by using the hash result, it is mathematically impossible to know the exact content of the original set of data, unless a secret key is used.
- Removes the necessity of a trusted authority for creating contracts, verifying ownership of property and trading assets
- Allows players of DeFi gaming projects to own their characters, items, and weapons
- Easy to store and transfer
- Used for speculation
- Used by scammers that promise false memberships or events to NFT buyers
NFTs are extremely important and useful, and can easily be created and traded by anyone with a computer.
This technology is the future of free economies. In an increasingly authoritarian world, the only weapon that regular citizens can use to defend themselves is these kinds of technologies, which remove the necessity of government control and, as a consequence, remove the opportunity for governments to abuse their power.
Together with cryptocurrencies, NFTs are the future of the global economy. The technology allows people to do the following activities freely, and without needing to trust in or pay the government or any authority:
- Buy and sell property
- Create a job contract or any other kind of agreement
- Trade assets remotely
For example, if an NFT is used to create a contract for selling a house, everyone will be able to verify its authenticity, and the house’s ownership can easily be determined in the event of a dispute.
NFTs are also very useful for DeFi gaming projects. These kinds of games offer players the possibility to own their characters, items, and weapons. On the contrary, in regular videogames, all assets belong to the developer company, even if the players have paid for them.
Also, NFTs are very easy to store and transfer in comparison with any other asset or property.
It is very important that the majority of the population understand the concept of NFTs, because for those who don’t, it is easy to make the mistake of trusting or, even worse, paying another human to verify and protect important assets or agreements, instead of trusting a free, verifiable, unmodifiable technology.
For this reason, it is necessary for us to try and educate others about the technology as much as possible, through information sharing (like lessons, videos, articles or posts) and direct action, such as by using NFTs more frequently. The more people use them, the easier it will be for others to understand their function and start participating.