Understanding How NFTs (Non-Fungible Tokens) Works - Part 2

Hello everyone, it is another great opportunity to bring to you today another chapter of my writing series. Days ago I started talking about understanding How NFTs works and I talked at extent the introduction to the Nfts works. Today I will be continuing from there and in today series, we will be talking about some vital points that made the Nfts world and also other aspect of Nfts world that you might not be familiar with. So stay tune

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I will start in this particular section today by discussing about the basic types of Nfts that we have available. So many of us have actually been hearing about the world fungible and non-fungible but few of us didn't really know what it actually means. But well today I will be breaking it down for us.

Fungible" vs. "Non-Fungible

• Fungible Assets

What do you think a Fungible Assets really means? So many times I have also heard the word fungible before but unknown to me I don't really know what it means not until I took step to actually make some research about it.
When we talk about Fungible Assets, we mean assets that are quite interchangeable with each other because they share identical features in both values and properties. When we talk about the word Fungibility, we mean a key property for things that need to be easily traded or exchanged. We have examples like currency, commodities, and stocks

• Non-Fungible Assets

When we talk about the Non-Fungible Assets, we mean those assets that are actually unique and can not be replaced except if the value want to be losed. What do I really mean by that, each non-fungible asset or item rather has its own unique characteristics so they are not actually interchangeable compared to the Fungible Assets. Examples like Real Estate and the Popular NFTs we are all aware of also.

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Now to the main section of the topic on how Nfts actually works. Non-funginle tokens have actually achieve massive height over the years most especially in 2021 in every aspect of life ranging from art, entertainment and digital collectibles. When we truly want to understand how NFTs work, we will need to understand the technology behind and the various use cases of it.

• Blockchain Technology

Nfts works on the blockchain technology as they are built on blockchain platforms which are examples like Ethereum been the most popular one. There are actually a whole lot of key features that blockchain technology possesses that makes it easy for Nfts to be built on it. The first one is the Decentralization feature of Blockchain. That means there is no central authority that controls the blockchain. Not only that, the feature that Blockchain technology has in terms of transparency helps in the accountability of it also making the Nft world to thrive.

• Smart Contracts

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The second foundation that makes Nfts work to actually work is based on smart contracts. Nfts make use of smart contracts for agreement among those assets holders. This helps Nfts to work without intermediaries also making a smooth transaction to flow also. This is really a very important foundation that helps Nfts to survive.

• Minting Process

The next feature that I will like to talk about is the fact that creating Nft which we tagged as minting helps the Nft world to work and get sustained. There are also some steps that is involved when creating or should I say minting Nft. The first step is the creation of the digital content by the creator himself.

In this particular step, the creator creates either a digital file that can come in different forms like art, music, video and many more. The second step is the minting of the NFT. This is the major step as the creator now use a Blockchain platform for this particular step. Then the last step is what I called the token generation. In this last step, the Blockchain generates the unique token that has been linked to the digital file.

I will like to stop here as I conclude. With my post today, I strongly believe you have really been able to gain something valuable and gain massive insight on how the world of Nfts works starting from the Part 1 and to this final Part.

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