NFTS MEANING:
In recent years, a new carrier of digital art, Non-fungible tokens (NFTs)Art, has swept the global market. What exactly are NFTs art? How did it come about? What impact does it have on the future art market? The full name of NFTs is Non-fungible tokens, which translates as "non-fungible tokens" . It is a unique and verifiable source of digital media. Driven by blockchain technology, NFT art is gradually subverting the entire digital art world.
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Broadly speaking, human assets can be divided into two forms, namely "fungible" and "non-fungible". "Fungible assets" refer to all assets that have the same external value as similar assets. The most common example is the currency in circulation on the market. Assuming that two people each hold a currency, since the two currencies have the same value, the two parties can exchange the currency without any loss of profit in the process. Conversely, "non-fungible assets" are unique assets that cannot be exchanged for equivalent assets of the same kind. Common examples are souvenirs or collectibles. For example, a regular baseball is worth a world of difference from a baseball signed by Babe Ruth. Likewise, an original Monet painting cannot be exchanged for an equivalent Monet reproduction, even if the two works appear to be identical.
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"Non-fungible assets" are assets that are unique and cannot be exchanged for equivalent assets of the same kind.
The concepts of homogenization and non-homogenization are closely related to daily life. Try to look around and imagine the object in front of you, can you replace it with something that looks exactly the same on the surface? In this way, you will find that although we do not call our memorabilia or collectibles a "non-fungible asset," they are everywhere in our lives.
In fact, the definitions of homogeneous and non-homogeneous are fluid. For example, if a homogeneous asset is endowed with intrinsic value or unique characteristics, it can be redefined as a unique non-homogeneous asset. Conversely, if a non-fungible asset suddenly degrades (for example, you find out that your Babe Ruth signed baseball is a fake), its value is the same as a normal, homogenous asset.
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Non-Fungible Assets and the Digital World An item must be unique and rare in order to be classified as a "non-fungible asset". In today's online world, it is impossible to realize the above concepts in a sustainable and computable way - however, all this has been completely changed after the birth of NFTs art. Digital items are never rare, anyone can easily copy and share digital content circulating on the Internet, and artworks are no exception. Through the rich network media, we can easily access digital art; however, this convenience also makes it difficult for us to give digital art a unique value. NFT provides authentication for the source of digital assets and prevents abuse. The original ownership, scarcity, and uniqueness of virtual items have always been difficult to ascertain, so defining the value of digital art is no easy task. Due to the above difficulties, it is difficult for digital artists to establish and maintain their creations, and cases of plagiarism and theft are not uncommon. The biggest problem is that it makes it difficult for the general public and would-be collectors to treat digital and physical art equally, believing the former to be less valuable than the latter.
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So, how does NFT verify the source of digital art? The reason why NFTs are called "non-fungible tokens", not "non-fungible assets" or "digital non-fungible assets" ), since they are products driven by blockchain technology.
Blockchain Technology and NFTs So, what is blockchain? To use a simple analogy, the blockchain is a decentralized, permissionless digital ledger. Decentralized means that the blockchain is not owned by anyone. Instead, it is collectively stored and maintained by a group of users who do not know each other, as opposed to centralized ledger technology (servers), which are overseen and maintained by a single entity. Permissionless means that anyone can store data on the blockchain, maintain the ledger, and view recorded activities. Like the real world, both homogeneous and non-homogeneous assets are stored on the blockchain network. Common blockchain homogeneous assets are BTC (Bitcoin) and ETH (Ether). As mentioned above, the external value of these assets is the same. Ether used to buy and sell represents an exchange of value, just like currency in circulation on the market, rather than trading a unique asset. Homogeneous tokens such as ETH can be split and divisible, meaning that (almost) all split ETH can be bought, sold and traded.
After the artist casts an NFT art , the collector can freely buy and sell the token in the art circle, and its operation mode is equivalent to the second-hand market. The source of all NFTs is public, which is convenient for collectors to confirm their authenticity before purchasing or auctioning NFTs. Blockchain networks such as Ethereum also support non-fungible assets. Homogeneous assets have gained popularity in recent years, especially in the past year. Unlike ETH and other homogenized assets, NFT is a unique and indivisible asset token on the blockchain. To transfer ownership of an NFT, tokens need to be transferred from one user address (i.e. the user) to another. NFTs can't be split into smaller units - it's like you can't cut a Babe Ruth signed baseball in half and have its value stay the same.
Each NFT is unique and its identity can be verified. Every time a user "mints" (ie creates) an NFT work on the blockchain, a certain number of tokens are generated. NFTs are often accompanied by numbers such as "1x1" or "1x100", which list the number of tokens issued by the NFT art at the time of minting, proving its scarcity. Once the token is issued, the above number cannot be changed, and the creator and creation date of the group of assets will also be permanently recorded in the NFT. Even if the artist mints the same NFT work in the future, the public can trace whether the NFT belongs to the original or post-production version. The data of NFT is completely public and irreversible, similar to the concept of version number. After NFTs are issued on public networks such as Ethereum, the public can access the above data by themselves, thereby greatly reducing the cost and difficulty of verifying the authenticity, originality, uniqueness and ownership of specific assets.
After the artist casts an NFT, the collector can freely buy and sell the token in the art circle, and its operation mode is equivalent to the second-hand market. The source of all NFTs is public, which is convenient for collectors to confirm their authenticity before purchasing or auctioning NFTs. In addition, NFTs are equipped with automatic commissions, allowing artists to profit from digital platforms. Since NFT is a unique piece of code on the blockchain network, the programmer can write the NFT to return a certain percentage of the profit to the specified user address, including the original creator, in each transaction. In other words, the original creator does not need to directly participate in the NFT transaction, and can also profit from each resale. Last year, investors in the NFT market surged, drawing global attention. This phenomenon not only reflects the strong public interest in digital art, but also reflects the unique value of rare digital assets of verifiable origin. Thanks to the participation of creators, collectors and curators, all levels of the art market can benefit and thrive.
As blockchain technology continues to innovate, the entire NFT ecosystem will continue to expand and transform, improving technology and bringing more opportunities. Sotheby’s will present “The Fungible” in collaboration with Nifty Gateway, presenting a collection of digital art by renowned creator Pak, opening the door to a world of non-fungible assets. Pak uses blockchain technology and NFT tokens to provide collectors with unprecedented scarcity and ownership guarantees of digital assets, and to show the public the unique value of art endowed by technology. With The Fungible series, Pak re-examines our understanding of "value" and asks - what is the "value" of an item, and where does its ownership come from? Welcome to learn more about "The Fungible" auction and register to participate.