What is the purpose of NFT domains?
This is the same technology used for Bitcoin and other cryptocurrencies. NFTs have been around since 2014, but it's only recently that a wider audience has become aware of the technology. Now it's a red-hot trend that more and more people are catching on to.
In the beginning, NFTs were mainly used for digital art, but today the technology also includes videos, photos, music, gaming objects, artificial intelligence, domains and many other assets.
The asset, which can be a work of art or any other virtual work, is stored on the blockchain. The object is completely unique, so only one person can own the asset. NFT is sometimes described as a technology that has enabled the ownership of digital art, but its use today is much broader than digital art.
To better understand what NFTs are, let's take a closer look at the meaning of the word. "Non-fungible" means that the object is unique and not directly interchangeable. This makes NFTs different from cryptocurrencies because currencies are exchangeable. One bitcoin can be exchanged for another bitcoin without changing the value of the crypto wallet. In the case of NFTs, each NFT is completely unique and thus cannot be exchanged for another NFT without changing anything for the owner. A "token" corresponds to a smart contract created on an existing blockchain. In simple terms, it can be described as a digital fingerprint. If you buy an NFT, you become the owner of a unique digital asset and your proof of ownership is recorded in a smart contract on the blockchain.
How does the NFT work?
Why do people pay so much for tweets, digital artwork and YouTube clips? For many, it's hard to understand why anyone would want to pay for something that's available for free online. To understand why there is a huge demand, you need to understand how an NFT works.
An NFT is a unique asset stored on a blockchain. This means that it is traceable, making it possible to see who owns the asset. Ownership is recorded on the blockchain in the form of a cryptographic stamp and metadata that includes the address of the owner's crypto loan book. In other words, anyone using the blockchain can see the digital work, but only one person can own it. All information recorded on the blockchain is traceable and cannot be altered or manipulated. Only the owner of the NFT can change ownership, making the blockchain a very secure place to store digital assets.
It is important to remember that an NFT gives an ownership right to a digital asset. As with the sale of physical objects, the creator retains the copyright to the asset. However, the owner has the right to sell and use the asset. The metadata shows how the asset can be used and what the NFT represents.