Greetings Great Steemians. |
|---|
A great morning from Nigeria my fellow awesome steemians. Hope you all had a lovely night? And hope your morning is going great?
It's an uttermost pleasure to share my knowledge about NFT with the great steemians in the STEEM4BLOGGERS community on the theme;
NFT's
First of all we have to know the full meaning of 'NFT' which stands for 'non-fungible token'. The term Non-fungible connotes the meaning that something is unique or peculiar in nature and can't be replaced. In opposition other currencies like physical money and cryptocurrencies are fungible that is replaceable, which also states that can be traded or exchanged for one another.
WHAT IS AN NFT? |
|---|
Earlier on I said NFT means Non-Fungible Tokens (NFTs), now these tokens are unique in the sense that they are digital assets stored and programed on a blockchain, a supposedly decentralized digital ledger technology. All NFT'S are different and distinct in their own way and cannot be replicated in any circumstances, making it a one-of-a-kind. Unlike every other cryptocurrencies such as Bitcoin or Ethereum, Shiba Inu, Tron and so on, which are fungible; meaning replaceable and can be traded in a one-to-one method.
Further more every NFT is known to contain metadatas that is used to verify its authenticity, ownership history, including other important informations, thereby making it able to provide a transparent record of ownership.
HOW ARE NFT'S CREATED AND MINTED? |
|---|
All NFTs mints through the process that involves creating a unique and relevant digital product, which could be a course, an ebook in form of file, and so on that are programmed and designed to fit and accompany the item, thereby establishing a presumably encoded text file, which is then uploaded to an NFT verified contract, that is also later published on an NFT marketplace.
WHAT ARE SOME ADVANTAGES OF USING NFT'S? |
|---|
The most adept advantages of using NFT's includes;
- Authenticity;
Since NFTs are being recorded on a blockchain, they provide a unconfigurable and transparent record of an owner's asset's history.
- Accessibility;
NFTs are known to provide fractional ownership of very profitable digital assets that are accessible at any time.
- Immutable;
This means that a data that is recorded on the blockchain is final and can never be altered, deleted or hacked.
- Investment Opportunities;
Investment opportunities is one of the most viable and major benefit of NFTs, and could guarantee wealth.
- Traceability;
An important characteristics and benefit of NFTs is that it enables traceability and accountability through an immutable and transparent records of an owner's transaction history.
Amongst others these are the most common benefits of NFT.
WHAT ARE SOME POTENTIAL RISK OR DOWNSIDES OF USING NFT? |
|---|
Like I use to say everything that has a positive side must have a negative side. Same thing occurs to the NFT space, as there are lots of benefits so are there lots of risks attached to it, some of which includes;
- Intellectual property problem;
A problem of copyright theft, where by people creat al sorts of false airdrops, programming fake NFT freebies to exploit NFT enthusiasts, and also imitating of well-known NFTs, thereby skyrocketing and increasing danger of online fraud.
- Environmental concerns;
This is a situation whereby the consumption of power during the minting and creating of NFTs digital assets on the blockchain networks creates a problem to the environment and even harm humans.
- Cyber threats;
Of course the rise of NFTS as also create a high increase in cyber threats and online fraud risks for partakers of the projects.
- Fraud and Scams;
It's obvious that the lack of regulation in the NFT market has led to an increase in fraudulent activities, where by some individuals create and trade fake NFTs and using harmful tactics to take advantage of investors.
- Lack of liquidity;
One very unique major downside of NFTs is the lack of liquidity in the market. This means that unlike other traditional investments like stocks, real estate, and cryptocurrency it is difficult to find buyers for NFTs, and this always leads to value reduction.
There you have it; my entry to the contest. I hope you enjoyed your read, and if you do remember to drop a comment.
MIND YOU
If you enjoyed this story follow @lordmarvel.m135 to enjoy interesting stories..
I would like to invite my friends here on Steemit;@vincio-stratic, @oblessgod, @zernish5021 to partake in this contest.