“Non-Fungible Tokens (NFTs) are digital assets on the blockchain that represent ownership and authenticity of unique items. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible, meaning each unit is the same as every other unit, NFTs are distinct. Each NFT has a digital signature that makes it impossible for NFTs to be exchanged on a like-for-like basis.

NFTs are typically built using a specific type of smart contract standard such as ERC-721 or ERC-1155 on the Ethereum blockchain, which enables the creation, buying, selling, and trading of these digital assets in a secure and transparent manner. This technology has broad applications, including digital art, music, video clips, and other forms of creative work. It can also extend to virtual real estate, collectible items in games, and even tokenized physical assets.

The unique attribute of NFTs allows artists and creators to monetize their digital content directly, bypassing traditional intermediaries. They can sell their work anywhere in the world to anyone connected to the blockchain, receiving payment directly. Additionally, smart contracts can be programmed to automatically send a portion of any resale value directly back to the original creator, providing them with ongoing royalties.

The transparency of blockchain ensures that every transaction involving an NFT is recorded on a ledger that is immutable and accessible to all. This not only prevents fraud but also ensures that the ownership history of each NFT is clearly traceable.”