You might be wondering: what is an NFT, anyhow?
What is NFT
(Non-fungible token.)
A non-fungible token (NFT) is a unique identifier that can cryptographically assign and prove ownership of digital goods.
As NFTs for digital artwork have sold for millions - sometimes tens of millions - of dollars, to say they're popular could be an undersell. In the first half of 2021, NFT sales hit $2.5 billion.
However, once you understand how NFTs work, you'll see there are additional use cases for this technology.
That doesn’t make it any clearer. Right, sorry. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. You gave up a Squirtle, and got a 1909 T206 Honus Wagner, which StadiumTalk calls “the Mona Lisa of baseball cards.” (I’ll take their word for it.)
How NFT works
Many NFTs are created and stored on the Ethereum network, although other blockchains (such as Flow and Tezos) also support NFTs. Because anyone can review the blockchain, the NFT ownership can be easily verified and traced, while the person or entity that owns the token can remain pseudonymous
Different types of digital goods can be "tokenized," such as artwork, items in a game, and stills or video from a live broadcast - NBA Top Shots is one of the largest NFT marketplaces. While the NFT that conveys ownership is added to the blockchain, the file size of the digital item doesn't matter because it remains separate from the blockchain.
What is NFT in simple word
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. (Some already have).
ads