What is NFT (Non-Fungible Token)?
An NFT, or Non-Fungible Token, is a type of digital asset that represents ownership or proof of authenticity for a specific item or piece of content. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and interchangeable, NFTs are unique and cannot be replaced with something identical.
NFTs are built on blockchain technology, primarily on Ethereum, but they also exist on other networks. They use smart contracts to encode ownership, metadata, and other essential details, making each NFT distinct. Common use cases include digital art, music, gaming assets, virtual real estate, and collectible items.
For example, when you purchase an NFT of a digital artwork, you own the token proving your ownership and authenticity of that piece, even though others might still view or copy the image online. This ownership is recorded on the blockchain, ensuring transparency and immutability.
NFTs have revolutionized industries by empowering creators to monetize their work directly and enabling collectors to participate in digital economies. However, NFTs have also sparked debates about environmental impact and speculative markets, as some see them as overhyped investments.
