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NFTs Explained

NFT stands for non-fungible token.

Non-fungible is an economic term used to describe items that are not interchangeable for other items because they have unique properties, such as furniture or your computer.

NFTs are used to represent ownership of unique items, such as art, collectibles, game items, even real estate. An NFT can only have one official owner at a time and they're secured by blockchain technology – meaning no one can modify the record of ownership or copy/paste a new NFT into existence.

How NFTs Work

NFTs have some special properties:

  • Each token minted has a unique identifier.
  • They're not directly interchangeable with other tokens 1:1. For example 1 ETH is exactly the same as another ETH. This isn't the case with NFTs.
  • Each token has an owner and this information is easily verifiable.

In other words, if you own an NFT:

  • You can easily prove you own it.
  • No one can manipulate it in any way.
  • You can sell it, and in some cases this will earn the original creator resale royalties.
  • Or, you can hold it forever, resting comfortably knowing your asset is secured by your blockchain wallet.

And if you create an NFT:

  • You can easily prove you're the creator.
  • You determine the scarcity.
  • You can earn royalties every time it's sold.
  • You can sell it on any NFT market or peer-to-peer. You're not locked in to any platform and you don't need anyone to intermediate.