What is NFT (What is NFT Trading)

What is NFT In blockchain technology, everyone is an equal participant. NFT stands for non-fungible token, which is a unique and one-of-a-kind piece of data (such as an image) or audio file that is equal to other ownership proofs, unlike fungible tokens (such as ERC-721 and ERC1155).

Currently, the hottest application in the market is digital art collectibles. These works include digital copyright assets, virtual land, music streaming, etc. Game props or art cards also fall into this category, but they are not physical items in the true sense and can only be traded in the form of tokens. Why is blockchain considered a technology that disrupts traditional finance? We can see what NFT looks like from the figure below. What is NFT? What is NFT? It is a new form of cryptocurrency: a token standard protocol called “ERC-20” on the Ethereum network, used to transfer the value of digital goods to the smart contract system. ERC20 represents a special type of token, such as physical gold and practical bitcoins, as well as scarce tokens with specific attributes. When a user purchases an NFT, they will receive corresponding rewards. This mechanism allows holders to receive rewards based on the rare items corresponding to the NFTs they own. If you want to use ETH for transfers, you need to pay Gas fees.

NFTs in the ERC series are usually composed of different types of tokens: replaceable assets (tokens), indivisible tokens, and unique digital objects.

ERC-721 defines the ownership proof of ERC-20. This method allows developers to create verifiable smart contracts and serve as the underlying structure of off-chain contracts. Verifiable digital objects can be called “content” and can be marked as NFTs at any time. Transferable rights are also introduced. These rights include ownership proofs and transferable digital certificates. For certain interests of creators, they may not need to support their projects with investments from artists. However, NFT itself does not mean there is no intellectual property rights. Although people can freely choose the works or services they want to sell, the value of NFT depends on how much the creators are willing to accept fees. Therefore, as long as they are willing, they can provide support to the community regardless of market conditions.

As more and more people enter this field, more and more people hope that their products and services will be more widely adopted. At the same time, this has also brought new sources of income, allowing more people to come into contact with the crypto world, because the emergence of NFTs greatly promotes this process.

What is the underlying technology of NFT? Its core lies in programmable blockchain technology. The essence of NFT is a decentralized database. Each NFT can be seen as a code or application. One of its main features is that it is completely open source, so it does not rely on third-party intermediaries. Therefore, anyone can build new things based on NFTs.

What is NFT Trading

The NFT market has experienced explosive growth in the past few months.

According to the data statistics from NonFungible.com, there are currently over $600 million in assets minted on the blockchain, including the Ethereum ERC-721 token standard and smart contract protocols, the OpenSea platform under RarityLabs, and the Solana public chain ecosystem. This indicates that as more and more investors join this race, cryptocurrency trading is entering the mainstream. So what is NFT trading? We can combine NFT with DeFi to understand it as decentralized finance (DecentralizedFinance) or “borderless digital economy” (Netflix). Simply put, NFTs are virtual assets on the blockchain. By creating verifiable credentials to represent an object, these items can be traded without changing their attributes. NFTs are something indivisible and irreplaceable, just like works of art, they have unique value propositions and scarcity characteristics.

However, since everyone has their own identity and cannot fully control ownership, certain types of things cannot be acted upon. Therefore, anyone can purchase an NFT through a web application and transfer it to another web application for use. “Non-fungible” Tokens do not exist in the blockchain world, “fungible” tokens usually track different types of commodities. For example, you can exchange one of your clothes for something else, or exchange the same item from someone else.”

In addition, if someone is willing to sell works of their favorite artists without paying them, they can profit from this. But to achieve this, some complex methods are required: first, find a way for buyers to get their works. Then choose the artists you want to retain. Then you can also choose to buy these works directly on the exchange. Finally, you can choose to sell it instead of continuing to do so.

When you see a picture, there is an NFT, which is unique. For example, do I like to look at my paintings? Of course, not! This is because if you want to know why I would spend money to buy it or buy it, then you don’t need to pay the transaction fee anymore.

This is the best thing I can do now. I hope to help everyone make wise choices and establish enough influence in the market.

The original content is from ambcrypto, compiled and translated by Blockchain Knight. The English version is copyrighted by the original author. Please contact the editor for Chinese reposting.