![]() Smart contracts enable the creation, management and transfer of NFTs without intermediaries by automating and enforcing the relevant conditions.Ī critical aspect of NFTs is the implementation of token standards. This verifies the authenticity and legitimacy of the NFT as it changes hands over time.Īnother underlying technology for NFTs is smart contracts, which are essentially self-executing programs. Its transparent and immutable nature allows the ownership history of an NFT to be clearly traced. NFTs are based on blockchain technology, which provides a decentralized ledger that records transactions and ownership details. In recent years, NFTs have gained popularity as a way for creators to monetize their digital creations and for collectors to own unique digital assets. The non-fungibility of NFTs defines them as digital assets that represent ownership of one-of-a-kind items such as artwork, video game items, trading cards, virtual real estate, and other digital goods. What Is A Non-Fungible Token (NFT)?Īn NFT is a cryptographic token hosted on a blockchain and it can be used to represent a digital asset. ![]() In contrast, non-fungible assets are distinct and irreplaceable, which can appeal to collectors who want to acquire something truly unique. This means non-fungible items cannot be traded on a standardized scale as their value is derived from their uniqueness and the subjective value that buyers place on them.įungible assets such as currency are easily exchanged because of their uniformity. A non-fungible item cannot be directly exchanged for another item of the same value because both items have different characteristics. The term “non-fungible” refers to the irreplaceable nature of an item. NFTs offer creators new opportunities for monetization, fostering innovation and supporting the growth of the creative industries. There, they can act as a publicly verifiable proof of ownership on a decentralized database. ![]() NFTs are stored on the blockchain, which means they can't be easily edited, copied or duplicated. NFTs are unique digital assets that represent ownership of specific items, such as virtual concert tickets or rare pieces of art.
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