You may have heard of NFT'S before . you may even know that NFT stand for non-fungible token .But you might not know exactly what that means and why this new technology is important for artist ,creators and businesses.
#what does NFT means A fungible item is one that can be replaced by an identical item. Think of a dollar bill. My $1 bill has the same purchasing power as your $1 bill and any other $1 bill in circulation. In other words, they’re mutually interchangeable.
A non-fungible item, on the other hand, is unique and can’t be copied or substituted. The Statue of Liberty, the Mona Lisa, and a ticket for a seat at the Super Bowl are all non-fungible items. That is to say, they’re one-of-a-kind.
#why NFT is important Let’s go back to the concept of smart contracts. As I wrote above, a smart contract is a computer program stored on the blockchain that runs when certain conditions are met. So what kind of conditions are we talking about here and how can they be used by creators and businesses?
With collectible art projects, royalties can be programmed
into the smart contract. Typically royalties are set at
around 10%. This means that every time the NFT is sold,
a percentage of that sale is programmatically sent to the
original creator’s wallet. This guarantees that the original
creators are always linked to their projects, a concept
called provenance, and they’ll be able to share in the upside
as their work becomes more well known.