What is a NFT?

NFT, short for "non-fungible token," refers to a unique digital token that cannot be replaced. In contrast to physical money and cryptocurrencies, which are interchangeable, NFTs possess individual characteristics and a distinct digital signature. These digital assets can take various forms such as photos, videos, audio files, and other digital formats. Notable examples of NFTs encompass artwork, comic books, sports collectibles, trading cards, games, and a multitude of other creations.

NFT's are cryptographic assets that exist on a blockchain, a decentralized public ledger for recording transactions. Each NFT possesses unique identification codes that differentiate them from one another. These codes facilitate easy transfer of tokens between owners and provide a means to verify ownership. The value of NFTs is determined by market factors, such as supply and demand, and they can be bought and sold similar to physical assets. NFTs serve as digital representations of various assets and can even represent tangible items like artwork and real estate. This tokenization of real-world assets is believed by some to enhance the efficiency of buying, selling, and trading, while potentially reducing the risk of fraud.