What is an NFT?

Non-fungible tokens (NFTs) are unique digital assets verified and managed using blockchain technology. Unlike standard cryptocurrencies, which are interchangeable and identical in value, NFTs are distinguished by unique identification codes and metadata. This uniqueness means that no two NFTs are the same, even if they appear visually similar.

NFTs can represent a wide array of digital (and sometimes physical) assets, such as artwork, collectibles, music, videos, and more. Their value is subjective and determined by the market and individual perceptions. For example, a digital artwork tokenized as an NFT might fetch a high price due to its perceived artistic value or rarity, while another might be considered of little value.

The key aspect that sets NFTs apart from standard cryptocurrencies like Bitcoin or Ethereum is their non-fungibility. Each NFT is distinct and cannot be exchanged on a one-to-one basis with another NFT, even if they're part of the same collection or series. This is in contrast to fungible tokens (like most cryptocurrencies), where each unit is identical to and interchangeable with any other unit of the same type.

NFTs are often bought, sold, and traded on specialized platforms. Their value can fluctuate greatly based on factors such as their rarity, the reputation of the creator, the history of ownership, and trends in the digital art market. The blockchain technology underlying NFTs ensures the authenticity and ownership history of each token, making them secure and resistant to forgery.