What is an NFT? NFT literally stands for “non-fungible token” and it is a one of a kind and non-interchangeable piece of data. This data or unit is on a blockchain, which can be defined as a form of digital ledger.
Bitcoin can be seen as the digital answer to physical currency, while NFTs may now be seen as the digital answer to physical collectibles. Similar to Bitcoin, NFTs are also highly secure and cannot be forged. On the other hand they differ in that each NFT is totally unique.
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.
Literally, anything digital can become an NFT. Though most of the buzz surrounds the selling of digital art and collectibles, the flexibility of the technology means almost anything can be tokenized. Domain names, in-game assets, tweets, songs, and videos, just to name a few things, can all be linked to a smart contract, establishing proof of ownership.
An NFT of an online photo for example can be sold and owned as an original belonging to the buyer, but anyone can still download a copy of that same photo. It’s like buying the original Mona Lisa painting, only you have it but other people can in theory have their own from the internet.
For artists, NFTs open up their artwork to a whole new audience and allow for a different way of doing business. The more popular your artwork is and the more it’s resold, the more benefits you’ll see from that in terms of financial gains as well.
