WHAT ARE NFTs?
NFT stands for ‘non-fungible token’: a one-of-a-kind digital asset that exists on the blockchain and cannot be replicated. NFTs take many forms – digital artwork, virtual apparel and music are some of the most common. There are thousands of these unique digital collectables, each with a unique digital identifier stored on the blockchain.
HOW DO NFTs WORK?
NFTs are essentially a unit of data, stored on a digital ledger that is associated with ownership of a digital asset. An NFT can be music, art, videos and lots more – when you create an NFT it is known as “minting”. You are basically writing the underlying “smart contract” code. The smart contract code decides the qualities of the NFT, and it adds them to the relevant blockchain on which the specific NFT is coded. Many standards have been established for smart contracts. Each NFT’s digital identifier means that only you can own it, and their unique nature is what makes them so highly sought-after. Some collectors show off their NFTs in digital galleries, digital frames, as icons on social media or avatars in games. Alternatively, you can subtly store them in your crypto wallet if you prefer to keep your collection on the low-down. Sometimes NFTs can be offered with physical counterparts, but this is not the NFT itself – rather a bonus, or gift with purchase.