Non-fungible Tokens are forms of digital assets such as pictures, videos, gaming objects, and artwork that are carried on the blockchain network. This is the same network that underpins other currencies such as Bitcoin, Ethereum and others.
But unlike cryptocurrencies, NFTs are non-fungible, meaning that they cannot be exchanged with other assets of the same value. NFTs were introduced in the year 2014 and from then, they have grown to become one of the main avenues for selling digital art (source: abmagazine.com). and although the copies of the digital files can be found freely on the internet, people still pay millions of dollars to keep the original copies of the files (source: dailymail.com).
NFT domains have enabled people to create, store, share, and even sell their digital content online. On this site, users are able to receive donations in the form of ‘coffee’ from fans and admirers of their content. In addition, it allows users to verify the real owners of digital art. However, the company or individuals behind it will be kept anonymous.
The rise of NFTs
The rise of non-fungible tokens is a result of the benefits that they bring to users. First, through the process of securitization and unitization, owners of a digital asset are able to monetize its value through the sale of digital tokens. This is the case for both the fungible and non-fungible tokens available.
Secondly, it is very hard to fall victim to fraud when dealing with NFTs. This is especially because it is possible to trace the ownership of the digital assets just from anywhere. In fact, you can follow the ownership of digital artwork from creation to its current owner right from the NFT platform.
Lastly, creating an NFT linked to a specific digital art gives the owner more control over the duplication of the asset. This is especially since NFTs provide a way to prove ownership of digital assets.
From a broader perspective, Non-Fungible Token is just a computer code that resides on a distributed ledger. If an NFT represents a physical asset, it will have a code that includes an encrypted, digital representation of the said asset.
However, it is important to note that the owner of the NFT does not own the right over a digital asset. For example, an NFT holder may own the NFT but not have the right to duplicate the digital file. Such rights are the sole preserve of the original creator of the asset.