What are NFTs and Smart Contracts?

nft smart contract development

Non-fungible tokens (NFT) have taken the world by storm. These NFTs are suddenly becoming discussed in groups of society because it could be the next best thing. It is similar to how people were interested in smartphones, and now almost everyones owns one. 

 

However, some people are still confused about the NFT concept. It is quite hard to explain in detail because of its complexity, but to summarise, NFTs are basically digital certificates. Keep reading if you intend on educating yourself on the inner workings of NFTs.

nft smart contract development

What exactly are NFTs, and how do they work?

 

As previously mentioned, they are non-fungible tokens that act as digital certificates. They are unique in every way and they are presented digitally to anyone who purchases or sells it. Fungible tokens are also known as bank notes or bitcoin. A bank note valued at 5 can be exchanged with another bank note with the same value. That is why they are fungible.

 

It is impossible to trade NFTs with something of very similar value, that is why they are called non-fungible tokens. You can compare it to trading cards, a card that has special value to it because it was made in a certain year, and it is part of a limited edition collection. This card cannot be traded with another card, even if it is part of the same collection. Because each of the cards has a unique aspect to it.

 

These are what makes NFTs out of the ordinary. They intend to make an item unique from everything else in the world. That is why the current NFT marketplace highlights digital art such as drawings and music. 

 

Now, you might be thinking, how does any NFT generate earnings or revenue. How does it contribute to you as someone who is interested in joining the craze? Well, that really depends on how you join the field as it is different if you are a buyer or a seller.

nft smart contract development

 If you intend to sell your art as NFTs, you can earn money from every purchase or trade made with your art. NFTs offer that feature to artists so that they can get a percentage of the earnings. It is similar to how companies have copyrights to superhero characters, they can earn money every time someone uses the character. 

 

If you are a buyer, the benefits include supporting the artists you love. Plus, you can use the purchased art for your own use. You can also have some usage rights attached to it, so if the artist decides to release the rights to the NFT, you have full rights to it. 

 

This is where smart contracts come in. These are contracts that allow you to make transitions between seller and buyer. These contracts cannot be altered, hacked or changed in any way. So it is a secure way to carry out dealings with other sellers or collectors. It basically acts as a digital receipt. If you want to make your own smart contract and don’t know where to start, you can check out nft smart contract development for more.