By Carlo Caloisi – Sep 19, 2022
NFTs, which stands for Non-Fungible Token, are digital certificates based on Ethereum‘s blockchain technology aimed at uniquely, irreplaceably and non-replicably identifying ownership of a digital product.
It is one of the applications of decentralized finance (DEFI), of which they are one of the emerging elements, which are automated through smart contracts and which do not involve intermediaries or hierarchies.
The fields of application of this technology are many, such as intellectual property (e.g., a painting, a patent, a song), in video games (digital collectibles/gadgets for use in virtual games – metaverse), certificates (a person’s identity, licenses, etc.), financial documents (invoices, orders, etc.), and real estate (real estate and property).
To buy and sell them, follow these steps:
- Open an e-wallet where you deposit cryptocurrencies (Meta Mask, Coibase, etc..);
- Connects the e-wallet to a digital marketplace (Mintable, Opensea, NiftyGetaway, etc.);
- NFTs to be purchased on an auction basis appear in the marketplace;
- If purchased, the marketplace transfers money to the seller and ownership of the NFT to the buyer.
Underlying NFTs at present is a mechanism of trust between author and buyer.
In fact, defining the rights to that “something” becomes complicated since, legally, not all are equal (e.g., a tweet is different from a digital artwork which is different from a real estate property).
Another critical point is the copyright aspect, caused by the fact of the absence of a regulated marketplace.
SOURCES AND IN-DEPTH ANALYSIS
- What they are and how they work:
- What is decentralized finance (DEFI):
- What they are, how they work, how to invest on “non-fungible tokens”: https://www.agendadigitale.eu/documenti/nft-che-cosa-sono-come-funzionano-come-investire-sui-non-fungible-token/ ;
- Non Fungible Token phenomenon – what they are and application areas: https://blog.osservatori.net/it_it/non-fungible-token-cosa-sono-applicazioni
- Metaverse: https://www.tiaformazione.org/metaverse/ ;
- Blockchain: https://www.ileaderprojecterasmus.eu/2022/09/14/blockchain/
IMAGES (in sequential order)
- Pete Linforth from Pixabay ;
- Gerd Altmann from Pixabay ;
- A M Hasan Nasim from Pixabay