What Is a Non-Fungible Token (NFT)?

NFTs, or non-fungible tokens, are cryptographic assets on the blockchain that include unique identification codes and information that separate them from one another. They cannot be traded or swapped for equivalent, unlike cryptocurrencies. This is in contrast to fungible tokens, such as cryptocurrencies, which are identical to one another and so may be used as a means of exchange. Each NFT’s unique structure allows for a variety of applications. They’re a great way to digitally represent tangible things like real estate and artwork, for example. NFTs can also be used to eliminate intermediaries and link artists with audiences or for identity management because they are based on blockchains. NFTs may eliminate middlemen, streamline transactions, and open up new markets.
Collectibles, such as digital artwork, sports cards, and rarities, account for a large portion of the present market for NFTs. NBA Top Shot, a location to collect non-fungible tokenized NBA moments in the form of digital cards, is perhaps the most touted space. Some of these cards have fetched millions of dollars at auctions. Jack Dorsey, the CEO of Twitter, recently posted a link to a tokenized version of his first tweet, in which he said “just putting up my twttr.” The auction for the NFT version of the first-ever tweet has already reached $2.5 million.

A Non-Fungible Token is a unit of data on a digital ledger called a blockchain, where each NFT can represent a unique digital item, and thus they are not interchangeable. NFTs can represent digital files such as art, audio, videos, items in video games and other forms of creative work. However, if something is non-fungible, this is impossible - it means it has unique properties so it cannot be interchanged with something else.

It could be a house, or a painting such as the Mona Lisa, which is one of a kind. You can take a photo of the painting or buy a print but there will only ever be the one original painting.

NFTs are “one-of-a-kind” assets in the digital world that can be bought and sold like any other piece of property, but they have no tangible form of their own.

The digital tokens can be thought of as certificates of ownership for virtual or physical assets.