NFT, short for Non-Fungible Token, is a type of digital asset based on blockchain technology that represents unique ownership. Unlike traditional fungible tokens (such as Bitcoin or Ethereum), each NFT is unique and non-interchangeable.
Features#
Uniqueness: Each NFT has a unique identifier and metadata, ensuring its uniqueness and non-replaceability.
Indivisibility: Most NFTs cannot be divided into smaller units like Bitcoin, they are usually traded as a whole unit.
Verifiability: Ownership and transaction records of NFTs are stored on the blockchain, publicly transparent, and anyone can verify their authenticity and ownership.
Programmability: NFTs can embed smart contracts to achieve complex interactions and conditions, such as royalty payments, authorization of use, etc.
Examples#
Imagine you have a limited edition sports card, this card is unique with a specific number and the athlete's signature. Now, you put this card on the internet and authenticate and record its ownership through blockchain technology. This digital sports card is an NFT.
CryptoPunks is one of the earliest and most representative NFT projects. Created by Matt Hall and John Watkinson of Larva Labs in 2017. CryptoPunks consists of 10,000 24x24 pixel avatars, each avatar being a unique NFT stored on the Ethereum blockchain.
By giving digital assets uniqueness and ownership, NFTs are changing the game rules in multiple industries. It not only provides new sources of income and business models for artists and creators but also brings new interactive ways and economic systems to collectibles, games, and virtual worlds.