Shilpa R

What are blockchain and bitcoin?


A blockchain is a growing collection of records, known as blocks, that are linked together using cryptography. Each block contains the previous block's cryptographic hash, a timestamp, and transaction data. The timestamp shows that the transactions happened at the time the block was published in order to be included in the hash. Because each block includes data about prior ones, they form a chain, with each subsequent block reinforcing the ones before it. As a result, blockchains are resistant to data modification because, once recorded, data in any specified block cannot be changed automatically without affecting all subsequent blocks.

Blockchains are usually delegated networks to be used as a publicly public ledger, with nodes adhering to a protocol in order to communicate and validate new blocks. Although blockchain records are not unchangeable due to the possibility of forks, blockchains can be properly secured by layout and represent a distributed computing system with high Byzantine fault tolerance.

Bitcoin is a cryptocurrency that operates independently of any central authority or supervision from banks or governments. Instead it is based on peer-to-peer operating systems and cryptography.

Bitcoins are currently split into seven decimal places: a milli is a thousandth of a bitcoin, and a satoshi is a hundred millionth of a bitcoin.


What is the purpose of bitcoin?

Bitcoin was built to facilitate individuals to bring money over the internet. The digital currency was designed to be a non-centralized payment method that could be used in the same manner that traditional currencies could.


Definition of NFT

A non-fungible token (NFT) is a one-of-a-kind, non-transferable data record stored on a blockchain, which is a type of digital ledger. NFTs can be linked to digital files that can be reproduced, such as pictures, videos, and sound. NFTs use a digital ledger to provide such a public certificate of authenticity or proof of purchase, but the fundamental digital files can be shared or copied freely. NFTs are distinguished from blockchain cryptocurrencies such as Bitcoin by their lack of interchangeability (fungibility).

 

Even though NFTs are linked to specific values via certificates of authenticity, the digital assets cannot be interchanged or tried to replace with others because each NFT exists on a decentralised digital platform based on blockchain technology.

Every purchase on a blockchain is recorded in a digital ledger, which clearly and openly records each NFT transaction in order to prove who does own the item. The majority of NFTs exist on the Ethereum cryptocurrency's blockchain. The Ethereum blockchain, like Bitcoin, creates permanent digital records of each and every transaction that utilises that cryptocurrency. It also produces an unchangeable ledger of all NFT transactions.

The NFT creator retains the product's copyright and the right to duplicate it many times as they would like. Although the originator may start making multiple copies of the initial, if the buyer of the NFT wants to make copies of the item, they must first receive approval from the creator, and each copy is considered a unique NFT.

 

From where we can buy NFT: 

NFTs are sold in collaboration with auction houses or in NFT marketplaces, such as:

  • NBA Top Shot, an online platform that keeps running on the Flow blockchain where users can bid on, buy, and offer digital highlights of NBA players. An NBA Top Shot video of LeBron James paid tribute to Kobe Bryant sold for nearly $400,000.
  • OpenSea is a peer-to-peer global market for NFTs, virtual collectables, as well as unique digital items that run on the Ethereum blockchain.
  • Rarible is a public marketplace secured by the Ethereum blockchain that allows artists and creators to issue and sell NFTs.
  • SuperRare is an Ethereum-powered digital art marketplace where people can buy and sell NFTs from top artists.
  • Known Origin is an artist-driven Ethereum blockchain platform where digital creators can authenticate, display, and sell their collectables and artwork.
  • Decentraland Marketplace is a centrally controlled virtual reality platform powered by the Ethereum blockchain that enables users to create, experience, and profit from what they build and own.
  • Arkane Market is a digital collectables marketplace for hobbyists and gamers. Arkane Market is built on Binance's smart chain, as well as the Ethereum and Polygon blockchains.

NFT Buying platforms in India -

The following are the top three marketplaces where you can invest in NFT in India - 

  • OpenSea is an NFT platform that supports multiple kinds of Ethereum-based NFTs that you can buy or bid on, as well as create and mint your own NFT. It has a wide range of popular and growing options that you can browse with a community that is growing every day. You will need an Ethereum wallet, such as MetaMask or Coinbase, to buy or trade NFTs on OpenSea. Overall, OpenSea is a fantastic marketplace, particularly for buyers of popular or uncommon NFTs.
  • Binance is a well-known cryptocurrency trading platform that has recently added an NFT marketplace. It features different criteria from incredibly skilled creators, as well as NFT secret boxes, and it is the first forum to feature IGO (In-Game Offering). It also contains BNB or BUSD-based NFTs in addition to Ethereum-based NFTs, which are less costly, and the Gas money is considerably below than Ethereum. Users also can transfer their WazirX BNB and BUSD funds to Binance. Binance is ideal for new investors because of all of these options.
  • WazirX is a cryptocurrencies exchange in India, and they recently launched their own NFT platform called WazirX NFT. The main attraction of this industry is that it showcases some best-hidden talents from India, and then you'll find amazing masterpieces by these Indian creators. If you are simply an art enthusiast, you will undoubtedly invest in these NFTs. For NFT transactions, WazirX employs WRX tokens. This token is based on BSC (Binance Smart Chain), a cryptocurrency similar to Ethereum, and it is the only medium of exchange that can be used to purchase NFT on this platform. You can still connect your wallet, such as MetaMask, and transfer funds to convert into WRX.

The NFT Hype

In the first quarter of 2021, NFTs went completely berserk. It saw a 26-fold increase in volume YOY compared to Q1 2020, for a total of $1.5 billion in sales. Essentially, it all began when influential individuals began collectively promoting NFTs, either by buying or selling. Twitter's founder, Jack Dorsey, sold his first tweet as NFT for $2.9 million. Today, NFT technology is revolutionising digital rights to the property for a wide range of applications, and it has a wide range of practical applications. NFT sales already had topped $2.5 billion in the first half of 2021. Collins Dictionary has named the phrase NFT the word of the year, citing an increase in abbreviation usage of 11000 per cent in 2021.

 

How NFT Works? 

The very same blockchain technology that enables digital currencies is used to power NFTs. When a user purchases an NFT from any online market, the information in regards to the possession of a specific token is now recorded in the blockchain. This ownership right could be verified, as well as individuals can decide who is the real owner of the specific NFT.

The majority of NFTs are currently part of the Ethereum blockchain. Different blockchains, however, can apply their possess versions of NFTs. Binance Smart Chain, for example, powers the WazirX NFT marketplace in India.

An NFT is created, or “minted” from digital objects that represent both tangible and intangible items, including Art, GIFs, Videos and sports highlights, Collectibles, Virtual avatars and video game skins, Designer sneakers, Music.

Even tweets count. Twitter co-founder Jack Dorsey sold his first-ever tweet as an NFT for more than $2.9 million.

Essentially, NFTs are like physical collector’s items, only digital. So instead of getting an actual oil painting to hang on the wall, the buyer gets a digital file instead.

They also get exclusive ownership rights. That’s right: NFTs can have only one owner at a time. NFTs’ unique data makes it easy to verify their ownership and transfer tokens between owners. The owner or creator can also store specific information inside them. For instance, artists can sign their artwork by including their signature in an NFT’s metadata.

 

The pros and cons of NFTs 

So, non-fungible tokens are clearly popular right now. But what are the positives and negatives of NFTs? We’ve outlined some potential pros and cons below: 

Pros of NFTs 

Some of the advantages of NFTs that are often stated include: 

  • They grant artists ownership of digital assets. When content creators create a virtual asset, an NFT allows them to not only demonstrate authenticity but also profit from their work. With widely circulated memes, this could mean a substantial income stream for the creator.
  • They are one-of-a-kind and collectable. Many people enjoy the thrill of acquiring something unique or rare. NFTs add a layer of legitimacy to collectable content, particularly digital assets.
  • They can't be changed. Because non-fungible tokens are blockchain-based, they can never be changed, erased, or replaced. This is a valuable quality to have when proving the origin or authenticity of digital content.
Cons of NFTs

Of course, as with every new technology, there are some potential downsides. The disadvantages of NFTs include: 

Of course, as with every new technology, there are some potential downsides. The disadvantages of NFTs include: 

  • It is a market for speculation. The big question is whether or not NFTs have any true value. Are they a good long-term bet? Is it just a fad? It's difficult to say for sure. The emotive quality of NFTs is presently only one value.
  • Copying digital assets is possible. Just because someone owns the NFT of a virtual currency does not mean there were no copies of it. Art can be duplicated, GIFs can be reposted countless times, and video content can be shared on a variety of social media platforms. The fact that you own the NFT does not imply that you control the asset – you simply have proof of ownership.
  • Environmental costs. Much has been written about the ecological consequences of blockchain-based digital currencies such as Ether and Bitcoin. It appears to take a lot of processing power to enter records onto a blockchain. The sustainability of blockchain-based assets is a big question.
  • They are vulnerable to theft. Even though the technology underlying NFTs is fairly secure, many exchanges and platforms are not. As a consequence, there have been numerous reports of stolen NFTs following cyber security breaches.

 

Conclusions

It’s hard to say whether NFTs will be widely used over the years to come. Clearly, there is a huge interest in them at the moment, as well as several potential benefits. However, the technology is in its relative infancy, and there are numerous challenges to overcome. 


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