Non-fungible token

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explanation of how NFTs work

A non-fungible token (NFT) is a way of proving that a digital item is the only one of its kind in existence and therefore cannot be copied or reproduced without the owners knowledge and consent.[1] NFTs can be considered modern-day collectibles. They're bought and sold online, and represent a digital proof of ownership of any given item. NFTs are securely recorded on a blockchain.[2]

Technology[change | change source]

NFTs use the same blockchain technology used by crypto currencies like bitcoin to keep a ledger, that is a permanent record of all tokens and who owns them. Each entry is unique. NFT Marketplace as Opensea is a Digital Arena where NFTs (Digital Collectibles) are listed.

Usage[change | change source]

They are used wherever virtual goods can be collected and traded as one-off objects. Examples are collectibles, digital art, music and individual virtual objects used in computer games.

They differ from fungible tokens used in cryptocurrencies, which are exactly the same as each other and, therefore, can be used as a way of doing trade just as if they were money.[3]

References[change | change source]

  1. "Non-fungible tokens aren't a harmless digital fad – they're a disaster for our planet | Adam Greenfield". the Guardian. 2021-05-29. Retrieved 2021-06-02.
  2. "Where's the Future of NFT Headed?". Retrieved 2021-10-12.
  3. Sharma, Rakesh. "Non-Fungible Token (NFT)". Investopedia. Retrieved 2021-06-02.