Nowadays, Artwork-related news based on NFT makes it almost impossible for anyone using the Internet to avoid using this term. No matter what social media platform and news media you choose.
It also brings to mind many questions: What NFT stands for? NFT meaning? NFT vs Cryptocurrency? Is NFT a cryptocurrency? How NFT art is made?
What NFT stands for?
NFT stands for Non-Fungible Token. It is an evolution of the concept of cryptocurrency. Still, when NFT combines the advantages of blockchain and smart contracts with digital assets labelled “non-equivalence,” NFT may impact the future world.
Is NFT a Cryptocurrency?
NFT is an acronym for irreplaceable tokens created through blockchain technology. As the name implies, an irreplaceable token is unique in its form and cannot be replaced by another repeating unit. You can also treat non-fungible tokens as a unique digital property, with no other copies in the world.
For example, if I have one hundred dollars, you exchange it for another one hundred dollars. It makes no difference to me. Therefore, the renminbi is “substitutable”. It can also be said that if a thing is replaceable, there is something the same as it in the world. When it comes to the field of cryptocurrency, an ether is the same reason. An ether of mine is no different from an ether of yours. For currency, “substitutable” is actually a necessary condition, otherwise how to participate in circulation?
Let’s talk about “irreplaceable”. If a thing is unique in the world, it is irreplaceable. Many items are actually irreplaceable, such as some collectibles, such as Picasso’s paintings. Or our train tickets, plane tickets. The reason why crypto cats have collection value is because each cat is different. The look is different, and the price is different.
Therefore, NFT is different from Bitcoin and Ethereum, and each token is unique.
Coming to the context of cryptocurrency and smart contracts, look at the NFT-related ERC721 standard.
Let me talk about the ERC721 standard itself. At present, the most well-known platform for issuing tokens is Ethereum. The token of ERC20 is a “fungible token”, and every token issued in the same contract is the same. But ERC721 is a set of standards used to send NFT, and each token is different. ERC721 allows us to hold or trade NFT. NFT is unique because each token carries some unique data. For example, the token corresponding to each encrypted cat is accompanied by the cat’s DNA information. There are also other standards for issuing NFTs, such as ERC1155, which have been improved based on ERC721.
So why is there a set of standards for issuing NFTs? In fact, if you don’t follow the standard, you can send NFTs on your own chain and according to your own standards. But from the user’s point of view, if you want to hold ten types of NFTs at the same time, you may have to install ten apps. With the standard, the token of each family is stored in the same wallet, then the transaction is also convenient. The standards are unified, and of course it is convenient to go to the exchange.
Of course, NFT is a concept, so not only can it be issued on Ethereum, other blockchain projects can also support NFT. We talked so much about ERC721.
NFT vs Cryptocurrency ?
NFT and encryption currencies such equivalence token blockchain are based on cryptographic assets, but also have a unique identification code and can not be tampered with; But the difference between NFT and cryptocurrency is that NFT cannot be exchanged for equivalent value.
In other words, the market value between each NFT is different, non-homogeneous, and indivisible.
It’s not like every cryptocurrency (such as bitcoin ) is equivalent, so it can be directly used as a medium for commercial transactions;
like a bitcoin in my encrypted wallet, and the bitcoin in your hand, although this Bitcoin is actually two strings of different codes, but the two are equal in value, and can be divided into 0.1 Bitcoin as a transaction medium.
Since the NFT is built on the blockchain, the NFT, like the cryptocurrency, can record in detail the ownership information that is difficult to be tested. For example, artists can upload their own signatures in their own NFTs.