What is Blockchain Technology and how does it help in NFT?
Blockchain is a database that is shared in the nodes of a computer network. It is a way of storing information with the utmost level of security making it impossible to hack or modify it. In blockchain systems data is stored in digital format electronically.
A digital ledger of transactions is maintained and is shared in the entire computer network on the blockchain. In every block of the chain a number of transactions are stored. Whenever a new transaction took place its record is added to the ledger of every participant.
A decentralized database that is monitored and controlled by multiple users is popularly known as DLT i.e. Distributed Ledger Technology. Blockchain is also one type of DLT where transactions are stored with a hash. A hash is an immutable cryptographic signature.
Blockchain is mostly used in bitcoins. It helps in creating and maintaining secured transactions record. The biggest advantage that blockchain offers is that data is stored in the safest form and there is trust without the intervention of any trusted third party.
Blockchain technology is extremely secure. Whenever there is a new block added to the chain it is added in the end. Once a block has been added at the end it is practically impossible to go back and make changes in the contents of the block until and unless the network has some commitment to do so. Every block has a hash of its own, which is created by a mathematical function that converts digital information into a string of numeric values and characters.
If a hacker attempts to alter the content of blockchain and try to steal cryptocurrency from others then he won't succeed. Hacker will make changes in one copy that will not match with other copies. When everyone else will cross-check their copies with others this one copy of hacker will stand as an odd one out. This will make the hacker's copy illegitimate ultimately.
Non-Fungible Token (NFT)
It is a cryptographic asset present on a blockchain having a unique identification code and metadata to make it is easy to distinguish from each other. NFT has its unique properties and therefore it is not possible to replace or interchange it. Cryptocurrencies can be exchanged or traded at equivalency but not NFT. They are not like fungible tokens and serve as an efficient medium for carrying out commercial transactions.
How does blockchain technology help in NFT?
Non-fungible tokens are present on a blockchain which is a distributed database that stores the information of transactions. Blockchain is popularly known as the underlying process which contributes to making cryptocurrency exist for real.
To be precise NFTs are held on the Ethereum blockchain and other blockchains also support them. NFT is developed from digital objects which represent tangible and intangible objects both like: gifs, art, video game skins, music, and more.
So it can be said NFTs are more like some physical collector of items in a digital form. The buyer instead of getting a painting to hang on a wall gets its digital file with its exclusive ownership right. Yes, it's true at a time NFT can have a single owner. Unique data of NFT makes it easy to identify its owner. The owner or developer of NFT can also store some particular information in it. For example, it contains some artwork then the artist can sign their artwork by including their signature in the metadata of the NFT.
NFTs and blockchain technology together present artists an opportunity to monetize their work. Like artists do not have to solely rely on exhibitions, art galleries for selling their creations. They can sell directly as an NFT to a customer. Artists can also go for royalties as it will bring them a percentage of sales when their creation is sold to a new customer. This feature is extremely beneficial for the artists as generally, they do not receive anything from their artwork once they are sold but with royalty they can.