What is NFT?
One of the most prominent news topics of recent days is NFT. It may be the sound of footsteps for a new era in art and digital finance. Millions of dollars worth of sales are made in NFT platforms, bringing many questions alongside.
A Non-Fungible Token (NFT) enables the digital signing of assets such as audio, image and documents. This way, the artifacts and digital data are recorded on the blockchain with a unique signature. The data becomes completely unique thanks to the system defined as a Non-Fungible Token. The biggest reason for the millions of dollars worth of sales is that the digital object sold cannot be copied by others in any way.
NFT stands for Non-Fungible Token
Non-fungible tokens, recorded in digital ledgers called blockchains, are commonly created with Ethereum protocols. Created with ERC-721 and ERC-1155 protocols, these tokens cannot be substituted for any other crypto assets, unlike standard cryptocurrencies. In other words, they have appropriate values with the data they create their identities.
How does NFT work?
The non-fungible token possesses a unique identity that proves the authenticity of the data. The authenticity is ensured by the unique digital data embedded to the NFT platform. This identity, verified via blockchain ledger, allows the authenticity of the data to be confirmed and is managed by a cryptographic algorithm. The cryptographic algorithm creates and tracks an identity that can only be claimed by the token holder.
What Does an NFT Do?
Non-fungible tokens secure the identified data with a 40-digit encryption of letters and numbers. This allows the owner to store it in their digital wallet. In today’s technology, it is impossible to crack the 40-digit crypto password. So, it gives absolute rights to the holder of the crypto asset.
How are Digital Artworks / Crypto-Artworks Sold with NFT?
NFT Platforms, such as Rarible, Opensea, and superRare, allow digital artists to exhibit their work for sale. In these platforms, the author can quickly generate a non-fungible token via a digital crypto-wallet. Once inside the blockchain, artifacts and tokens can find a new buyer through events such as auctions and direct sales. After the sale, the token with the unique signature of the data is sent to the buyer’s digital crypto-wallet, enabling him to prove ownership of the artwork.
Digital Artwork Sold at Record Prices via NFT
Despite being active since 2015, NFTs were initially associated with cryptocurrencies. Only for recent years have they gained a different dimension with the sales of digital artworks. Between 2020-2021, the crypto art market traded hundreds of millions of dollars worth of transactions, and started to draw attention to these crypto assets.
Digital Artist Beeple’s Artwork Purchased by Christie’s for $69M via NFT
Created by American digital artist Mike Winkelmann, also known as Beeple, the NFT work in JPEG format called “The First 5000 Days” showcases the popularity of non-fungible tokens. “The First 5000 Days” was sold for $69.3 million by the world-famous British auction house Christie’s. It is also of great importance because the sale is made with Ethereum cryptocurrency. The work, which became the 3rd most expensive work among the works of living artists, gave a great impetus to the sales of crypto art with NFT in the world.
In addition to art, sales made by names such as famous businessman Elon Musk and Twitter CEO Jack Dorsey have made non-fungible tokens widespread and attracted great attention.
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