What is NFT?
What is NFT?
NFT stands for non-fungible token. It’s generally built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends. Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another.
NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.
What is an example of an NFT?
Non-fungible tokens can digitally represent any asset, including online-only assets like digital artwork and real assets such as real estate. Other examples of the assets that NFTs can represent include in-game items like avatars, digital and non-digital collectibles, domain names, and event tickets.
In theory, the scope for NFTs is anything that is unique that needs provable ownership. Here are some examples of NFTs that exist today, to help you get the idea:
- A unique digital artwork
- A unique sneaker in a limited-run fashion line
- An in-game item
- An essay
- A digital collectible
- A domain name
- A ticket that gives you access to an event or a coupon
How do NFTs work?
At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs.
- The majority of NFTs reside on the Ethereum cryptocurrency’s blockchain, a distributed public ledger that records transactions.
- NFTs are individual tokens with valuable information stored in them.
- Because they hold a value primarily set by the market and demand, they can be bought and sold just like other physical types of art.
- NFTs’ unique data makes it easy to verify and validate their ownership and the transfer of tokens between owners.
Is NFT a cryptocurrency?
A non-fungible token (NFT) is a unique digital asset that represents ownership of real-world items like art, video clips, music, and more. NFTs use the same blockchain technology that powers cryptocurrencies, but they’re not a currency.
Can you make a lot of money from NFTs?
Some of the most expensive NFTs ever sold include a digital work of art from an artist named Beeple for nearly $70 million, a tweet from former Twitter CEO Jack Dorsey for a bit less than $3 million, and a video clip of Lebron James dunking the ball for $200,000. That’s a lot of money.