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What is Non-Fungible Token, abbreviated as NFT?

It is the digital representation of a physical asset in the virtual world, such as an audio file, image, or video. As the name suggests, it is a digital asset that cannot be altered or exchanged. Consequently, NFTs have no equivalent in the digital realm. They can be used for virtual items like virtual shoes, virtual games, virtual photos, and artwork, essentially anything virtual. What makes NFTs unique and one-of-a-kind is that they are created using blockchain technology, with a significant portion being produced according to Ethereum token standards. This process gives them a registered token form.

Despite the fact that everything on the internet can be copied, NFTs created with blockchain cannot be replicated. Even if you have a copy of an NFT file, it does not make it an NFT. The ownership of an NFT file, as well as the identity of the creator, is recorded on the blockchain due to the file's creation using blockchain technology. Therefore, NFT files cannot be altered on the internet. NFT files produced with blockchain technology cannot be used or manipulated by anyone. Because NFT files recorded on the blockchain are just one of many pieces of information on the chain, they are impossible to alter.

Blockchain functions as a sort of record-keeping tool. In the virtual world, who owns blockchain-prepared files, who they are sent to, and the digital documents' signatures are all recorded in the system. These records can be viewed and verified by others. This unalterable nature of documented NFT files is why they are called Non-Fungible Tokens. Selling NFT artworks using this method, which has gained a lot of attention recently, has opened the door for artists to convert their own works into NFTs and sell them to collectors.

How to Create NFTs?

Anyone in the world can create NFTs. To do so, you need to have a digital wallet. By purchasing a small amount of Ethereum and using the NFT marketplace link, you can convert the desired file into an NFT file. To transform a virtual item into a digital one, it is necessary to first register the item on the blockchain network. An NFT marketplace session must be opened for the file that is to be transformed into an NFT. Then, a process called "minting" the NFT, which involves uploading the file, is carried out. Immutable parameters for the NFT to be created are determined. Characteristics such as the number of copies to be produced and the royalty to be paid from the next sale are set for the NFT. Ethereum transaction network fees are paid, and the NFT is created.

There are websites known as NFT marketplaces for creating NFTs. The creation of NFTs is done through the Ethereum network. Many collectors can be found on these NFT marketplace websites. The converted file can be sold in the market for the desired price. An artist can retain copyright to their NFT artwork even after selling it. They can also create more NFTs of the same artwork.

What is the Purpose of NFTs?

NFTs exist within the blockchain system, just like other cryptocurrencies. Just as cryptocurrencies have a monetary value, NFT files also have a monetary value. When you purchase NFT files, you acquire a unique digital artwork that no one else possesses. Jack Dorsey, the founder of Twitter, sold his first tweet on Twitter as an NFT for $2.5 million. Similarly, one can own a screenshot of the tweet Jack Dorsey sold on Twitter. However, as mentioned above, what makes this sold tweet valuable is that it is recorded on the blockchain, has a unique and single code.

Can NFTs Be an Investment?

The key difference between NFTs and cryptocurrencies is that NFTs cannot be exchanged or replicated. In addition, the value of the digital product is determined by the person who created it. Just as money is exchanged for a physical work of art, digital artworks like NFTs are similar in that regard. In other words, a digital asset like NFT coin, since there is no other like it, cannot be traded with another cryptocurrency.