Neither in the pocket nor in the safe, still the price is in millions, the mathematics of NFT which makes one a millionaire overnight

New Delhi. In the last few years, one word has gained maximum discussion in the internet world and that is NFT. For many people, it is still a mystery as to why a person spends crores of rupees for something like a digital photo, video or cartoon, when it can be downloaded for free from the internet. But the real stake is not in that photo but in its “original ownership rights”. This is the reason why NFT is being called the new “status symbol” and “digital property” of the digital world.

With the increasing use of crypto and blockchain technology, the NFT market gained momentum across the world. Many artists, game developers and investors have earned crores of rupees from this. Some people made money overnight by selling digital art, while some sold NFTs bought cheaply at many times the price. However, the faster this market went up, the more risky it was considered to be. In such a situation, it is important to understand what NFT is and how its entire mathematics works.

What is NFT?

The full form of NFT is Non-Fungible Token. If understood in simple language, it is the “Original Ownership Certificate” of any digital thing. Non-Fungible means a thing which cannot be replaced by another thing. Like the original Monalisa painting or the Kohinoor diamond. There may be copies of them but only one will be considered original.

Similarly, when ownership of any photo, video, song, gaming item or digital art available on the Internet is registered through blockchain, it becomes NFT. That means people buy the actual “digital ownership rights”, not just the photos.

The entire system rests on blockchain

The entire system of NFT runs on blockchain technology. Most NFTs are created on the Ethereum blockchain. Blockchain is a kind of digital ledger in which every transaction is recorded forever and cannot be changed.

When a person buys an NFT, it is recorded on the blockchain who is now the owner of that digital item. This record becomes his real identity.

Photo can be downloaded, no ownership rights

Many people ask that if someone can save the NFT photo then what is the use of paying crores of rupees. The answer lies in “Original Ownership”. Just like millions of people in the world can download the photo of Monalisa, but there is only one owner of the original painting.

The person purchasing the NFT is considered the certified owner of that digital asset. This is what makes it special and expensive.

How the game changed for artists

NFT opened a new way of earning for digital artists. Earlier, any art was easily copied on the internet and the artist did not get much benefit. But NFT has a technology called “Smart Contract”.

In this, the artist can set that whenever his NFT is sold again in the future, he will get some percentage of royalty. That means the artist gets a lifetime earning opportunity.

Digital art has been sold for crores

Many such deals took place in the world of NFT which shocked the whole world. Digital artist Beeple had sold one of his digital art for more than Rs 500 crore. Whereas former Twitter CEO Jack Dorsey had sold his first tweet as NFT for about Rs 21 crore. NFT collections like Bored Ape Yacht Club became so popular that many celebrities bought them for crores of rupees.

how people are earning money

Earning from NFT is mainly done in two ways. The first method is for artists, where they create NFT and sell their digital art on platforms like OpenSea and Rarible.

The second way is that of investors. Many people buy a new NFT at a low price and sell it at a higher price when its popularity increases. This is the reason why some people sold NFTs worth thousands of rupees for lakhs and crores.

What is needed to buy NFT

Cryptocurrency is usually required to purchase NFTs. Most platforms accept cryptocurrencies like Ethereum or Solana. Along with this, a digital wallet like MetaMask is also required. While listing or buying NFT, you also have to pay “Gas Fee”, which is a network transaction fee.

Not just art, but also future technology

NFT is not limited to just digital photos or cartoons. Experts believe that in the future, house papers, identity cards, tickets, gaming items and even the property of digital land i.e. Metaverse can also be in the form of NFT. Many companies are already working on this technology.

the risk is too big

There are definitely stories of making fast money in the NFT market, but this market is also considered very risky. The price of NFT completely depends on demand and supply. If an NFT loses popularity, its price can go to zero. This is why experts always advise that investing in high risk assets like NFT or crypto should be done wisely.