What is NFT and Why Should You Care?

Pranav Hooda
By Pranav Hooda 5 Min Read

An NFT is a non-fungible token, which means it can’t be interchanged with other similar tokens. It’s a one-of-a-kind. NFTs are a key component of blockchain technology, and they’re going to completely change the way we interact with digital assets.


What is an NFT?

NFTs are meant to be non-fungible. An NFT will never have two completely identical copies on the blockchain because there is no other possible way to achieve this. Imagine if you had this model of a particular kind of ferrari. It would be impossible for someone to make two of the exact same model of ferrari. If someone made a brand new model of it they could only make one. It couldn’t be identical to the original. The model would be its own singularity. That is an NFT. There are a number of ways of looking at the NFT. You could describe it as “the presence or absence of economic incentive.” This is the most common term used in the industry. Or, you could define it as a “digital asset whose value is attributable to their ability to be controlled by anyone in the world.

What are the benefits of NFTs?

They solve one of the biggest problems with blockchain technology: its lack of anonymity. NFTs create a trustless and immutable network, which protects users by securing data and providing decentralized trust. NFTs use public key cryptography to prove ownership and use. They’re designed to prevent the malicious alteration of the data on the blockchain by entities who don’t really own it. All transactions are reviewed by thousands of independent “miners” in an attempt to prevent double spending and other attacks. The term “non-fungible token” was coined by the creators of Colored Coins, one of the most popular cryptocurrencies out there.

What are the different types of NFTs?

There are three types of NFTs:

  1. Signature-based smart contracts: These are the most common type of blockchain-based NFT. You’ll see them at the heart of many real-world cryptocurrencies, including Bitcoin and Ethereum, but they’re not the only type.
  2. Storage-based smart contracts: These contracts are a popular and popular type of NFT because they can be used to store large amounts of data and power some of the most popular wallets and exchanges.
  3. Public-private key locked smart contracts: It is also known as a multisignature smart contract that is designed to require more than one key to activate. This is useful in trustless environments because it allows you to implement a policy where funds can only be released if a certain number of parties agree.

What is the future of NFT?

Non-fungible tokens are built on the same blockchain technology that powers bitcoin and ethereum. As the industry matures, we’ll likely see an increasing number of ways in which these tokens can be used. The future of non-fungible tokens is going to be very exciting. There are a lot of projects that are trying to solve problems for artists and creators by giving them a way to sell their digital art in a way that can’t be copied. Cryptokitties is one example. But we should keep in mind that such tokens can’t be exchanged for each other and some think that they are a solution to a problem that we don’t have. The problem they’re trying to solve is the fact that you can’t have true ownership of digital assets.


The race for the top cryptocurrency has become more intense than ever before. With so many new ICOs being funded, we expect many to fall by the wayside. While there’s still plenty of room for growth, even those standing at a 4X return have room for improvement. But for anyone still looking to make some serious gains, new altcoins could be just what the doctor ordered. Some, like Tezos and EOS, have legitimate blockchains and high levels of support. Others, like Rootstock, are just duds. Regardless of the outcome, here are the most promising digital asset projects in the current market. As always, cryptocurrency enthusiasts and investors alike are encouraged to do their own research before buying or selling any digital asset. Have you found your perfect cryptocurrency investment?

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Posted by Pranav Hooda
Pranav is a serial explorer of new ideas and internal thought, a visionary and a transformational thinker. He launched his first business at the age of 21, while still learning about it in college. He hustled from the bottom and worked hard to build his company Orento Group. He has been on the forefront of transforming innovation in various industries such as marketing, finance, education and social entrepreneurship. Today he’s an investor, mentor, and speaker who has helped many entrepreneurs to find their vision and start their journey.
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