What is an NFT token and how does it work?

14 June 2021

NFT tokens were created back in 2013 as a solution to one of the main problems of the cryptocurrency world - the fungibility of tokens. Any record in the blockchain system is considered a token, but they are not unique.
To sell something expensive, existing in a single copy, the market lacked a tool with a proven uniqueness. It was the NFT token.
How does an NFT token work?The whole system of its advantages is based on the non-fungibility of the NFT token. Such a token cannot be substituted, counterfeited, or another token can be substituted in place of the original NFT.
Since its creation, it has been tested for 4 years. In 2017, with the launch of smart contracts in the Ethereum system, NFT tokens were able to earn in full force. At first, all NFTs worked on Ether only, but now they have expensive commissions. An alternative is Binance Smart Chain. It is the same system with NFTs, but the fees are significantly lower.
What is an NFT token for?We are smoothly entering the fully e-commerce world? Everything is purchased on the internet and used on the same internet. The infrastructure is still gaining momentum, so now the main user base of NFT tokens is digital artists.
In 2021, the digital art market exploded. Several huge deals have attracted the public here. The largest of them were:
Mike Winkelmann sold his work for $ 69.3 million.Design studio Larva Labs sold one picture from the collection for $ 7.58 million.Digital artist Beeple sold his work for $ 6.6 million.
All the above is digital art. It was sold before, but it was more in the nature of support for the author. Proving real ownership of a purchase is difficult and expensive. You can download any picture on the Internet and no one cares that it is someone's property.
An NFT token is tied to a specific work of a specific author. The buyer is not buying a "work" that can be easily downloaded to any computer, but the NFT itself. Since it is unique, it is like a person buys a real painting.
If we compare NFT with a real painting, the following example suggests itself. Take the painting of Mona Lisa, by Leonardo da Vinci. The original is kept in the Louvre, and there are many reproductions around the world as well as with NFT. The token is in the possession of the owner, and "reproductions" of the digital picture can be stored on any device.
NFT perspectivesAt the moment, the loudest cases come from the world of art, but there are already those who want to sell or buy something from the real world. Legislative difficulties may arise with such items, but as far as e-commerce is concerned, there are no specific restrictions.
Non-fungible tokens will greatly facilitate working with legal rights. What we need piles of paper and a staff of lawyers for now can be done in a few clicks? Merch releases, movies and music rights, digital art, avatar clothing will all be sold through NFT.
Now there are no real restrictions on why you cannot buy a house, car, bag, etc. through NFT. There are no high-profile cases yet, but the capitalization of the NFT market has already exceeded $ 1.5 billion and is not going to stop any time soon.