Priyanshu Tiwari
by Priyanshu Tiwari
4 min read

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What is NFT ? #

NFT or “Non Fungible Token” is a token that exists on a distributed ledger/blockchain and is non-fungible in nature, meaning it can’t be replaced by another item or interchanged. One can buy NFTs using cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc. It is an application of blockchain technology where an artist can sell any piece of work like music, painting, video reel or even a tweet in form of a unique digital token. Yes, it can be copied or downloaded by other users butthat doesn’t affect the authenticity of the original artifact(just like traditional art). It is also used in identity management like in the form of digital passports or ID cards.

NFTs commonly uses ERC20, ERC-721 standard and ERC-1155 standards. NFTs have a uint256 variable called tokenId. So, for all NFTs the pair of smart contract’s address and tokenId must be globally unique.

How NFTs are different from cryptocurrencies ? #

All the cryptocurrencies are fungible in nature, thus can be interchanged with each other. For example, the value of one unit of Bitcoin will always be equal to any other single unit of Bitcoin. But NFTs are can’t be equated in the same way. The value of any individual NFT doesn’t co-relate to any other NFT. Each NFT has an identity(value) of its own.

  • Jack Dorsey’s first Tweet : $3 million
  • Beeple’s “Everydays: The First 5000 Days” : $69 million
  • LeBron James dunking against the Houston Rockets : $387,000
  • Nyan Cat GIF : $852,300

Where one can buy or sell NFTs ? #

What is DeFi #

Defi stands for Decentralized Finance. It is an umbrella term for financial services such as lending or borrowing money, trading, investing which works on the distributed ledger/blockchains. Basically, DeFi is the digital version of banks and other financial services that leverage blockchain technology. For example, how online e-commerce sites eliminates all the third parties intermediaries/merchants and directly sells goods to the customer. Similarly, DeFi provides an alternative to conventional banking system and in return takes a minimal service charge. In addition, the services are available 24x7, anyone from anywhere can transact with each other without applying to a central agency or disclosing their identity.

Applications of DeFi: #

  • Payment solutions
  • P2P borrowing and lending
  • Health insurance
  • Trading and investment
  • Online marketplaces
  • Asset management

DeFi tokens ranked by market capitialization: #

  • Tera (LUNA) : $29 billion
  • Avalance (AVAX) : $20 billion
  • Wrapped Bitcoin (WBTC) : $11 billion
  • Chainlink (LINK) : $10 billion
  • Uniswap (UNI) : $9 billion
  • Dai (DAI) : $9 billion
  • Tezos (XYZ) : $3 billion