MORE ON NFT'S from the Luno Platform
NFTs explained: Redefining digital ownership and creativity by Team Luno October 30, 2024 · 2 minute read In the ever-evolving landscape of decentralised technology, Non-Fungible Tokens, more commonly known by their acronym “NFTs”, have emerged as a potentially groundbreaking innovation, transforming digital ownership and changing the way we perceive digital art, gaming, collectibles, and more. What are NFTs? Non-Fungible Tokens are digital assets that represent ownership of a unique item or piece of content. Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible (each unit is the same and interchangeable), NFTs are non-fungible, meaning each token is one of a kind and holds distinct value. They can represent anything from digital art and music to virtual real estate and in-game items. NFTs are stored on the decentralised ledgers, usually blockchains, to ensure their authenticity and allow buyers to verify their ownership. How do NFTs work? Here’s how a breakdown of how NFTs function:Creation (minting): An artist or creator uploads a digital item (such as artwork or music) to an NFT marketplace. This process, called ‘minting,’ converts the item into a unique digital token stored on a decentralised ledger, usually a blockchain. Unique identification: Each NFT has a special digital code that makes it one-of-a-kind, ensuring its authenticity and uniqueness. Ownership and transfer: NFTs are stored in digital wallets and can be bought, sold, or traded. The blockchain keeps track of who owns each NFT, making it easy to prove ownership and prevent counterfeiting. What makes NFTs valuable? The value of an NFT comes from a combination of factors, including its rarity, creator, and cultural significance. Scarcity plays a major role. NFTs are usually released in limited editions, making them highly desirable among collectors. The reputation of the creator also adds to an NFTs value, with high-profile artists, musicians, and celebrities often commanding higher prices as fans seek to own a piece of their digital legacy.