"How do NFTs work?" "Why are NFTs
NFTs are still attracting a lot of attention in
2022, and stocks related to NFTs are on the rise.
NFTs are non-fungible tokens and are used in
various fields such as industry and games because they can prove their unique
For those who have doubts, in this article, we
will thoroughly explain the technology and process of NFT. We have extensively
explained the information about this NFT, so please see the end!
What are NFTs?
NFT is an acronym for "Non-Fungible
Token", and it means it is a token that cannot be replaced.
A simple explanation of non-substitutability is
"one and only".
It is a process that uses blockchain technology
to record data on the owner and creator of digital content to prove its
Until now, digital data can be illegally
downloaded or duplicated by anyone, making it difficult to protect the quality
of the original data. But, by converting the digital content into NFT and
linking it to a blockchain, it is possible to prove that it is unique.
A token is a crypto asset issued on a blockchain.
Blockchain features and benefits
Technologies like blockchain decentralization,
transparency, data management, non-falsification, and traceability are used in
The value of digital assets is recorded on the
blockchain. And it is characterized by semi-permanent storage of resources even
after the platform or game ends. Also, through smart contract technology, even
if the NFT is distributed twice, a portion of the profit will be returned to
NFTs are traded mostly on the Ethereum
Ethereum is both a virtual currency and a
platform for decentralized applications. Since NFT art and games are operated
using the Ethereum platform, Ethereum (ETH) is often used for transactions.
Difference between NFT and Crypto
We explained that NFT is a non-fungible token, a
crypto asset issued on a blockchain that cannot be replaced. So, it is not
exactly the same as crypto assets like Bitcoin (BTC) and Ethereum (ETH).
Crypto assets can be exchanged for other crypto
assets and cash, and can be used as currency.
On the other hand, NFT cannot be directly used as
currency or points but it is data that can prove its unique value. But, since
this data itself can have resource value, it means that you can earn resources
through NFT art and NFT games.
NFT Technology and Process
The technology and process of NFT are as follows.
As explained, the uniqueness of NFT is proven by
NFT data has the characteristic that it cannot be
replaced and issues like fraud and forgery do not occur.
With this feature, the items you find in the NFT
game become unique content and you can earn while playing the game by buying
and selling items.
Also in art and sports, NFTs can be used to
revitalize various businesses.
up in value
Bitcoin (BTC) has the same value regardless of
who owns it, but NFTs can record owner information and are unique and
immutable, so their value can increase.
Last year the total sales of NFTs for 2021 was
about 25 billion dollars (about 2.9 trillion), and it is expected that this
trend will accelerate in the future.
The fields in which NFTs are used have expanded
from early photos and videos and are now being traded in the metaverse and
prices are skyrocketing.
NFT content may increase in value in the future,
so you may want to focus on it as an investment target.
buy and sell
NFTs are crypto assets called tokens, so anyone
can buy and sell them.
With this feature, anyone can convert their
digital content into NFT and sell it to earn money. In the NFT industry, you
can buy and sell various content like images, videos, music, and Twitter posts.
In the NFT game field, it is possible to buy and
sell in-game items and characters and trade in-game land such as real estate.
This ability to trade freely has encouraged many
artists and content creators to enter NFTs. And at the same time, the number of
people who can make money from NFTs is also increasing.
Background of NFT's attention
Looking back at the backdrop of NFT attention,
the presence of the NFT industry trading at high valuations is noteworthy.
NFT art is digital content such as music, video,
and images that have been converted into NFT, and any content that can be
uploaded to the Internet can be converted into NFT.
Among the NFT arts, is a Twitter tweet by a
certain person famous for trading at high prices. That person was the first
tweet ever posted by Twitter founder Jack Dorsey, and it sold at an auction for
nearly $300 million.
Also, there are many examples of high-value
transactions, such as NFT art by an American artist named Beeple that sold for
nearly $29 million.
At first, the works of individual artists were
prominent, but now luxury fashion brands like Louis Vuitton, Prada, and Cartier
are entering the NFT art market. As the future of NFT is still there, various
companies have started entering the market one after another regardless of domestic
and foreign sectors.
Issues and problems of NFT
There are two issues and problems with NFT.
We explained that NFTs are non-fungible tokens
that can prove their uniqueness, but in fact, NFTs also have copyright issues.
In other words, NFT cannot confirm the identity
of the work and the author. In other words, if pre-transcribed content is sold
as original content on the NFT platform, that content is proven to be unique.
Additionally, there is a problem in that the
uniqueness of the work is lost when the author sells the same work as NFT on
other platforms. In other words, art copyright and NFT ownership are two
different things, which can lead to copyright issues.
The advantage that anyone can freely create and
sell and make money is a disadvantage that encourages copyright infringement
Apart from copyright, another big problem is high
NFT transaction fees are called gas fees and are
incurred when transactions use the Ethereum blockchain. Specifically, a person
involved in a blockchain transaction is called a miner who performs the task of
processing the transaction, and the gas fee is a fee for mining.
There is also the problem that the price of this
gas will increase if the number of NFT transactions increases.
If the NFT market expands and the number of users
buying and selling NFT increases, gas prices may rise further in the future. To
reduce gas costs, check current gas prices, slow down processing, or use an
exchange for lower gas prices.
How to purchase NFTs
The procedure for purchasing NFT instruments is
as follows. I will explain the case of trading with line NFTs as an example.
Open an account on a virtual
currency exchange: Since the NFT market deals in virtual currencies, first,
open an account on the exchange.
Create a wallet: Next, create a
wallet that manages virtual currency funds.
Deposit virtual currency from the
exchange to the wallet
Log in to NFT Market
Buy NFT products
This time, we have explained the process of NFT from
various points such as the relationship with blockchain technology, Ethereum,
and the background of attracting attention.
NFTs are used in various fields such as industry
and games, and many companies are now entering the scene.
It's not too late for those who want to make
money buying NFTs, so please use this article as a reference!