what are NFTs?/Article on NFTs/200-500words article on NFTs?

What are NFTs?

If you haven't been living under a rock, you’ve probably heard people talk about NFTs recently. You’ve also probably heard that some people have made a huge amount of money by selling NFTs. But what exactly are they and can you make and sell them too?

The initialization NFT stands for Non-Fungible Token. In technical terms, NFT is a unit of data on a blockchain, representing an unique digital asset. A blockchain is a sort of a digital ledger, where accounts and transactions between the accounts are recorded. Each block on chain contains data, including a unique hash calculated based on the previous block. This hash makes it impossible for the ledger to be altered without altering the whole chain. The whole story is a little more complicated, but that's the simple version. Cryptocurrencies such as Bitcoin and Ethereum keep a record of the transactions in a blockchain.

So, a NFT is a unit of data stored on the blockchain. These tokens are created or “minted” when a digital asset such as an image, a video file or any other piece of data is copied into a block on the blockchain. NFT can also simply be a link to the actual data somewhere else. The term “non-fungible” refers to the fact that these tokens are not fungible, or mutually interchangeable.

Users who want to sell something as a NFTs don’t need to know the details of how they work. Minting and all transactions can all be automatically handled by an NFT auction market website.

The highest value NFT sold was by a digital artist known as Beeple, who created a collage of 5000 of his daily digital art pieces and sold it for $69.3 million at Christie's. Several other multi-million dollar NFT sales have also been made. Big NFT sales happen because buyers look at them as an investment, meaning they expect the value of the NFT to go up over time.

Of course, NFTs have a couple of issues. Although each NFT is unique, the original file doesn't have to be. Anyone can still make a copy of the original file or even mint several unique NFTs from that same file. Nothing stops someone from minting a NFT from something they don’t even hold the copyright to.

Second issue is the environmental impact. Creating the hash for each block is a difficult calculation and requires a lot of processor time, most of which is “wasted” since only one hash will be the correct one. It is true that energy is used by the blockchain regardless whether it is making NFT transactions or not, but growing interest in NFTs means the energy usage will also keep growing. There have been efforts to offset these environmental impacts, and Ethereum Foundation says their network will switch to a less energy-intensive proofing process next year.

So, can you sell your photos or illustrations or other artworks as NFTs? The answer is maybe. Don't expect millions of dollars unless you're already a famous artist or have created something truly unique. If you decide to venture into the world of NFTs, keep the above mentioned issues in mind.

All in all, NFTs are an interesting application of a new technology and time will tell if they will remain only as such or become something more.