Friends, if you are actively involved in this world, spend your time on Twitter, Instagram, LinkedIn, youtube, then you would have heard of Something called NFTs.
What
are NFTs
The
full form of NFT is Non-Fungible Token, There are two key terms, Non-fungible
and Token. Let's start with non-fungible. If I would have to
Simply express it them, to replace the word fungible, I would use the
word replaceable. This means non-replaceable. Let me start with
an example, actually, let me start with a book. Now, this is a book,
There
are millions of copies of this books, because this book has been mass-produced,
So every copy is the same, that means if you buy book from Amazon on day one,
and then if you go to an offline bookseller and buy another copy on day 15,
there will be no difference between the two copies, they will be at same price
and that’s why you have got the exact same copy. That means that this book is replaceable.
You can replace this book with any other book at any point in time and that
makes it a replaceable assets.
But
this book is unique. Why is it unique? Because
I have read this book, no that’s not the reason for it to be unique, I’m not
that capable. While reading I have highlighted many things in this book, I have
put in a lot of post-it’s, which means this particular copy, this one is not
replaceable. You can't buy this particular copy from anywhere else because it
has my notes, my highlights, my scribbles and that makes it non-replaceable.
This book is only one of its kind and now you can use that for anything
possible, rights?
You
can imagine a bike or car that has only one unit or is manufactured in a
limited edition which is very different from the mas-produced cars that
there are. You can imagine a specific bottle, a specific calendar, a specific
image, it could be anything, something that is unique and is not replaceable.
What
is a Token?
Now
let's come to the concept of token, what is a token? Tokens are
basically riding on something called the blockchain. Let me try and
explain, what is the meaning of blockchain and thus what is the meaning
of a token? Suppose, I buy an item from you, let’s say I buy a book from
you, and you are a shopkeeper. I come to your shop and tell you that I want to
buy this book. You say it is ₹100, I scan your UPI with my phone, ₹100 flashes
on my screen, I enter my UPI pin and you get ₹100.
Now,
this transaction was very easy but what all happened in the background? When I
scanned it and entered the pin to pay ₹100, at that very second, in mini-seconds,
my bank checked whether I have ₹100 or not, and if I have then they would
approve the transaction. When the transaction got approved those ₹100 were
transferred to your bank and your bank registered that you received ₹100 from
someone, and this entire transaction was recorded. But all of this is
happening at a bank level, so the bank is keeping a record of every transaction
that is happening at your end because you have a bank account there, this is
called a centralized way of banking.
Secondly,
money as such is unlimited, the money that we have is actually just a piece of
paper, government can print it as many times as they want and they have done
but the truth is that the value of your money can reduce at any point in time because
a lot more money has been printed or just as it happened during demonetization,
the note or the currency itself is disregarded, somebody decided to void it
overnight. That is what centralization is. It is great because only one person
is founding all the rules and regulations but it is also not so good because that
one particular person has a lot of power, that did not be an individual, it
could be an institution, an organization, or a collective, but that is how it
is.
What
is a Blockchain?
Now
someone in 2009 and this someone is Santoshi Nakamoto, nobody knows who
he really is, and in that paper he said, can we transform this centralized
world into a decentralized world? This
means if I gave you ₹100 to buy a book, then a ledger was created can that be a
public record? This means, it is not bank-owned, but is publicly owned. That is
concept of blockchain. When I give you ₹100 actually not rupees but 100
tokens and the token is just the name for currency in the blockchain
world.
If
I give you 100 tokens then someone first has to come check whether I even have
100 tokens or not. Who is that someone? It’s not one person or one institution,
it’s the entire world theoretically. Thousands of computer that are spread
across the world will simultaneously check whether I have 100 tokens or not. If
I would not have, then it would say transaction disapproved and a record will
be created for the Same. If I would have, then it would say transaction
approved and my 100 tokens will be transferred to your account and that
transaction will be recorded forever and ever. Nobody can move it, nobody can
erase it, nobody can edit it and that is that’s the concept of blockchain.
The
connection between Blockchain and NFT
Now
how is the concept connected with NFT? Let’s come back to the book again,
this is a special book, this book has my highlights, my notes and that is why
there is only one of this kind. If I would want to sell this book and you would
want to buy this book , let’s say I would sell it for ₹1000, if you want to own
this, there has to be a way to prove that you own this. Now, this is a physical
book, but what if it was an image? What if it was a movie clip? What
if it was a poster? What if it was a song? Then how do you prove
that ownership of that one unique piece? It is by creating an NFT.
That is how NFT’s work. They are legitimate way to transfer ownership of
digital items even physical items and in such a way that your ownership will
always be on the record, it would be proven and it can never be edited or
deleted.
What
makes NFTs unique?
Now
when you present this idea, you are like, what is rubbish? It is just an image,
I can easily download it from the Internet. I have always been doing it, for my
homeworks, for my work. I don’t know who is the owner and how does it even
matter? You are right, but you are also wrong. Let me tell you why?
There
is an original and unique item, let’s say an original poster of ‘Sholay’,
and now its digital form is available and the director, or the film crew, or
whoever are the owners of that poster right now and they want to sell it, when
you buy that it is driving on the most fundamental human psychology element
of scarcity. Whenever anything is
scarce then we wish to have it even more. It is a simple way to prove to the
world that you have something which even if you replicate n numbers of times,
you would never be the rightful owner of it. In fact, I would even say that,
the more that thing will be replicate in a non-ownership format the
value of that true unique item will increase even more, because the more fakes
or reproduced items will exist in the world, the more the value of the original
item will increase.
Should
you ride this NFT wave?
Now
should you ride this NFT wave at all or not? A lot of people are
thinking that nfts are a great way to invest. I feel that it is too
early, too risky. So I would not recommend that you go through the
purpose or the journey of NFT for investing. Having said that, buying or
selling NFT is something that you should experience once. It is a unique
technology, a new world. Just imagine, when the Internet came into existence
the early adopters got to experience, a completely new form of technology. If
you find it very exciting to experience new technology, to get know about it,
then I would highly recommend that you should buy a cheap NFT or if you
yourself are an artist or a digital creator, then try to sell an NFT, not for
the money but just for the experience of it.
Conclusion
But
most importantly, it is important to understand the concept, the logic of NFT
because as I said blockchain is going to change the world. Because now
we have a mechanism through which we can record authenticity and ownership
without any dispute. Imagine that in the future there will be no dispute
over a house or property. There would be no dispute over the ownership of a
contract. There would be no dispute over the fact that do you have a degree
from this college or if it is a fake degree. All of that will go away because
now technology has a way through which you can 100% define ownership
forever and ever.
So
NFT as a fad, maybe a passing fad, but NFT built on the technology of blockchain
is here to stay and that is my opinion. If you have any interesting questions
on NFT or if you have any experience of buying and selling NFT, then please do
not forget to share in the comment section, because through that all of us will get an experience of what is
it to ride and experience this NFT wave. I hope this article was useful.
ये भी पढ़े :- बी ए हिंदी ऑनर्स BA Hindi Honours Syllabus 2021
ये भी पढ़े :- HM Gyan Mobile App – Read and Glow
ये भी पढ़े :- कुँवर नारायण की कविताएँ- हिंदी कविता
Please do not enter any spam link in the comment box.