June 1, 2022

What is an NFT?

NFT or non fungible tokens, are tokens that represent a unique digital asset on a blockchain. NFT's main function is to track ownership and authenticity in the digital world where items are infinitely reproducible. They are a cryptographic collectible and allow for digital items to have scarcity and be collectibles.

Prior to the creation of blockchain technology, digital items were not scarce. For instance, music, videos and images could be blasted across the internet and downloaded for free. However blockchains allowed for digital items to be tracked and authenticated, thus allowing for digital scarcity.

NFTs are special in the world of cryptocurrencies and blockchains. NFTs have a layer of uniqueness that other blockchain assets do not have. NFTs can store extra information that differentiates one NFT from another allowing for extreme scarcity of digital items. Additionally NTFs are easily verifiable. Thanks to blockchain technology it is impossible to counterfeit a NTF as the transaction history from the creator to the holder is immediately verifiable.