NFT under the hood

Introduction to NFT

NFT stand for Non-fungible token, NFT is a token that may represent something physical in real life. For example, NFT may be a digital representation of an image, in-game item, videos, or anything else. NFTs are sold online via NFTs market place and cryptocurrencies are used in the process of selling. NFTs was founded in 2014 and in 2020 and 2021 they become more popular. The NFT market was worth $15.70 billion USD in 2021 alone and is expected to reach $122 billion USD by 2028 according to Forbes. The following figure is an example of images that are sold as an NFT.

NFTs sample

The differences between NFTs, Cryptocurrencies, and Fiat money

Fiat money and cryptocurrency can be exchangeable which means one US dollar can be replaced with another US dollar and still you will have the same value. one dollar is always worth another dollar; one Bitcoin is always equal to another one Bitcoin, i.e. they are equal in value. NFT on the other hand is non-replaceable. One NFT has a digital signature (token) that is impossible to be replaced with another one, so NFT is unique and can’t be duplicated. One NBA Top Shot clip, for example, is not equal to every day simply because they’re both NFTs. (One NBA Top Shot clip isn’t even necessarily equal to another NBA Top Shot clip, for that matter.)

NFT example

NFT is exist in the blockchain networks and it can be written in any blockchain programming language which produces a smart contract. For example, the solidity programming language can produce an NFT program as in the following example.

// an example of a smart contract

//SPDX-License-Identifier: Unlicense
pragma solidity ^0.8.0;

contract NumberContract {
    // The Global public variables (make getters with "public")
    address public owner = msg.sender;
    uint256 public publicNumber;

    // Private variables
    uint256 private currentNumber;
    string private message;

    modifier restricted() {
        require(
            msg.sender == owner,
            "This function is restricted to the contract's owner"
        );
        _;
    }

    // A function to change the current number by any uint256 value. The stored number and the new number
    // should not be the same, If it is, it will fail with message "Identical numbers"
    // If the person who ask to change the number is not the contract owner, require function via restricted will fails
    // With returning error message "Only the owner who can update"
    function changeNumber(uint256 number) public restricted {
        require(currentNumber != number, "Identical numbers");

        currentNumber = number;
    }

    // This is how to return the current number.
    function getCurrentNumber() public view returns (uint256) {
        return currentNumber;
    }
}

Conclusion

NFT stands for a non-fungible token, which means it is unique in its value and it can not be exchangeable with another asset. On the other hand, fiat money or cryptocurrency can be replaceable and it can be exchangeable with another asset. In this post, I illustrated the NFT and a smart contract sample that represent an NFT.

You can find a sample NFT project source code at github Enjoy…!!!

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