In the recent years, blockchain technology had taken the online trading into the next level. Recently, the hype centered around NFT. According to a report by market tracker DappRadar, NFT trading volume shows 704% increase from the previous quarter. That means there is a massive amount of trading of digital assets happening worldwide within a few month. With this data, it is inarguable to say that NFT displays a promising future in the trading world. As promising as it is, how does an NFT work ?
NFT is an acronym for non-fungible token which refers to digital assets stored in digital ledgers called blockchain These digital assets represent real-world unique items in digital forms that can be traded online. The following are few examples of NFT sale:
Basically, an NFT is built on a blockchain, a database that stores cryptographed blocks of data then chains them together to form a single source of truth (SSOT) for the data. Every NFT acts as a certificate to the respective digital asset thus determine its authenticity and value.
Specifically, NFTs can represent digital items of any form like digital art, in-game, real-world items even tweets. The ownership of NFTs. NFTs are developed and stored on blockchain particularly Ethereum blockchain (others such as Tezos and Flow). With blockchain acting as a public ledger, NFTs allow the ownership to be verified and traced easily. The ownership of an NFT is managed by uniqueID and metadata that cannot be duplicated by any other token, hence an NFT only belongs to one owner at a time.
In term of copyright or licensing rights, it is bounded by the smart contract during when the NFTs are created by the original owner. Therefore, depending on NFTs, some will not grant a buyer with exclusive rights to the digital assets.
Therefore, when creators create an NFT, they can
In a glance, NFTs may bring a fortune. However, without proper understanding of the risk, it might turn someone’s well-being into a greater loss. As pointed out by Robert T. Kiyosaki, the founder of a private financial education company, “There are no bad business and investment opportunities, but there are bad entrepreneurs and investors”.
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