Technology News

What is NFT

NFT is short form of Non-fungible token. It is a unit of data stored in a digital ledger called a blockchain that can demonstrate that a digital asset is unique and therefore non-exchangeable. [1] NFT can be used to display projects such as photos, videos, audio, and other types of digital files. However, access to copies of the original files is not restricted by NFT buyers.

NFTs are digital assets that represent real-world objects such as art, music, gameplay, and videos. They are bought and sold online, often using cryptocurrencies, and are usually encrypted using the same basic software as many cryptocurrencies.

Although it has been around since 2014, it is now becoming more and more obvious along with the growing popularity of buying and selling digital art. As of November 2017, $174 million has been spent on NFT.

NFTs are usually of some kind, or at least very limited, and have a unique identification code. “Basically, NFT is creating a digital shortage,” said Ari Yu, chairman of the Cascadia Blockchain Commission for the Washington-based Technology Industry Association and chief executive of Yellow Umbrella Ventures.

This is in stark contrast to most digital creations, which almost always have unlimited stock. Assuming there is demand, a supply disruption should add value to the asset.

But at least in the early days, many NFTs were digital creations that already existed in some form elsewhere, such as the iconic NBA video game or a titled digital art version shared on Instagram.

For example, renowned digital artist Mike Winkleman, better known as “Beeple”, composed 5,000 paintings a day to create what was probably the most famous NFT of the time, “Every day: the first 5,000 days,” a work that was a record. on the collapse of Christie’s auction house for $69.3 million.

Anyone can view images online for free, or even entire image collages. So why are people willing to spend millions of dollars to buy something they can screenshot or download easily?

Because NFT allows the buyer to own the original item. It also includes a built-in certificate that can be used as proof of ownership. Collectors value this “digital commendation right” almost more than the object itself.

How is NFT different from cryptocurrency?

NFT means irreplaceable token. They are usually created using the same programming methods as cryptocurrencies like Bitcoin or Etherium, but that’s what they have in common.

Physical currencies and cryptocurrencies are “exchangeable”, meaning that they can be traded or exchanged for one another. They have the same value: a dollar is always worth a dollar; one bitcoin is always equal to another bitcoin. The cryptocurrency substitution makes it a reliable avenue for blockchain transactions.

The NFT is different. Each of them has a digital signature that makes it impossible for NFT to be interchangeable or identical (and therefore irreplaceable). For example, NBA top shot videos aren’t EVERY DAY just because they’re all NFT. (In this case, an NBA top shot video might not even be the same as another NBA top shot video.)

How does NFT work?

NFT is on the blockchain, a distributed public ledger that records transactions. You are probably familiar with blockchain as the main process that makes cryptocurrencies possible.

More specifically, NFTs are usually stored on the Ethereum blockchain, although other blocks support it as well.

NFTs are created or “formed” from digital objects that represent tangible and intangible objects, including:

• Art

• GIF

• Videos and sports presented

• Collection

• Avatars and video game skins

• Sports shoes from famous brands

• music

In essence, NFT is like a physical collection, only digital. Therefore, instead of hanging the original oil painting on the wall, the buyer receives a digital file.

You also get exclusive properties. That’s right – NFT can only have one owner at a time. NFT’s unique data makes it easy to verify ownership and transfer tokens between owners. The owner or creator may also store specific information about it.

EIP 1559 Update for Ethereum

Ethereum is the blockchain that manages Ethereum, Bitcoin’s second-largest cryptocurrency, and is undergoing a major update this week.

The London update scheduled for Thursday includes Ethereum Upgrade Proposal (EIP) 1559, which aims to change the way transaction fees, or “gas fees,” are calculated.

Currently, consumers have to bid how much they are willing to pay in order for miners to withdraw their Ether transactions, which can be quite expensive. According to EIP-1559, this process is controlled by an automated bidding system and the amount of the fixed fee varies depending on the level of network congestion.

Eric Connor, co-author of EIP-1559 said “It’s very useful for casual Ethereum users and makes it less intimidating to use the protocol.”

Another major change under EIP-1559 is that a portion of the transaction fees will be eliminated or withdrawn from circulation, reducing Ether delivery and potentially increasing its price.

Having said that, “EIP-1559 is one of the most important Ethereum updates since the network launched,” said Meltem Demirors, the chief strategic officer at CoinShares.

Here’s what investors need to know when the update is released.

What does EIP-1559 mean for investors?
EIP-1559 aims to strengthen the Ethereum ecosystem. Demirors said it had a big short-term impact on investors.

In the longer term, however, the proposal’s co-authors hope to deplete the ether by reducing supply. Connor said it was “very rewarding” for investors, especially “the United States has been talking about inflation lately”. This will give crypto investors the ability to hold deflationary assets.

However, Demirors said the EIP-1559 proposal alone would not topple Ethereum.

EIP-1559 will not lower gas prices or transaction prices on the network which can be very high.

However, the update remains important because it has the potential to improve the Ethereum user experience and potentially increase the price of Ethereum.

Demirors said other innovations are taking place around Ethereum. This includes plans to move from a Proof of Work (PoW) model to a Proof of Pledge (PoS) model later this year or early 2022.

In the PoS model, transactions can be accessed or checked based on the number of coins. In the PoW model, miners must compete to solve complex problems to verify transactions. Proponents of the PoS model say it will use less energy and increase blockchain efficiency.

Overall, I think the most important thing that EIP-1559 is showing investors is that Ethereum remains an actively developed project and refuses to stagnate and age,” Connor said.

The Ethereum network supports a number of projects in the cryptocurrency world, including irreplaceable tokens (NFTs), encrypted assets that are intangible digital elements such as images, videos, or game elements, as well as many decentralized, financial (DeFi) applications.

The update, known as Ethereum Improvement Proposal (EIP) 1559, will change the way transactions are handled and provide clearer pricing.

This will also reduce the delivery of ether and possibly increase its price significantly.

Several major exchanges have announced that they will be suspending deposits and withdrawals of Ether before and after adjustments.