NFTs use blockchain to assign certificates of ownership and record transactions. Blockchain is a distributed AI accountant that needs enormous amounts of processing power to function efficiently. Accepting the blockchain technology argument necessitates taking a step back to an excessively broad level before zooming back into the utmost micro. Gaming world like BattleSpecies has their own coins TACHYON to fuel their world.
Every exchange between two parties is based on trust
In many cases, both the seller and buyer trust that the money one is giving has an absolute value that will enable it to be exchanged for other goods. Blockchain aims to do away with such trust by using a distributed ledger to record our transactions, an algorithm to ensure that every copy of the ledger is identical, and tokens that can be assigned a value to each transaction.
NFTs introduce a ridiculous new abstraction
The ownership of digital media. I’ve always had the capability, for instance, to create an animated reaction gif from a television show and sell it to you for a set price. You would be a fool to pay for that reaction gif for a few reasons, not the least of which is that anyone could create a similar gif and you could discover it in the iMessage search engine. However, nothing has ever prohibited this transaction from taking place in the past.
The innovation around NFTs is that it uses blockchain technology to prove ownership and authenticity, a sentence that is so heavily caveated that to express it correctly in writing makes the writer look like a conspiracy theorist. The NFT assigns a ledger value to the piece of digital artwork, and then that ledger value is what is sold between parties. It is a non-fungible token – unlike Bitcoin or other cryptocurrency, the idea is these art pieces’ tokens’ inherent value doesn’t change.
Like the method used for Bitcoin, other cryptocurrencies, and other blockchain transactions, the algorithm used for NFTs necessitates that computers carry out a certain amount of complicated work before they can access the ledger. This is how it stops fraudulent transactions: by raising the bar for writing access to the point where it is practically impractical.