G-B7N2H7TNZP
top of page

WHAT IS AN NFT?


NFT stands for non-fungible tokens. According to Investopedia, “fungibility is the ability of a good or asset to be readily interchanged for another of like kind.” [1] Thus, non-fungible refers to an asset that has no ability to be substituted or interchanged for another of like kind. Token refers to currency on the blockchain. Essentially, NFT is a cryptocurrency. This currency can be an asset that has value and can be collected. However, NFT cannot be traded or exchanged for one another like how cash and cryptocurrencies can be traded due to being fungible.

NFT is a digital and non-physical asset that illustrates the proprietorship of real-world objects such as digital artwork, sports cards, rarities, games, videos, logos, etc. [2] NFT is mostly preferred in the creation and sale of digital artworks. These artworks are considered a modern-time art collection. The main reason behind NFTs being a multimillion-dollar market is that they are found to be more reliable than conventional art collections. The reliability is achieved through each NFT having a digital signature encoded which makes it impossible to copy exactly unlike conventional artworks which are easier to be replicated.

For artists, being able to sell artworks digitally directly to a global audience without using an auction gallery allows them to retain most of the profits from sales. Furthermore, as copyrights can be programmed into digital artwork, the artist continues to receive a percentage of the sale profit each time the work is sold [3].

NTF which is a digital asset of intangible and tangible objects is securely recorded in the blockchain technology behind cryptocurrency. This ensures that the asset it is linked to is unique and original and makes it difficult to modify or imitate. Thus, NTF combines art and technology as well as transforming digital assets into easy-to-tradable assets on the blockchain.

Basically, NFT helps artists and creators to create a universal and digital platform to sell and secure their artworks internationally. The fact that all NFTs contain unique information and are easily accessible reveals the advantages of owning a product digitally compared to a physical product with collectible value. It prevents the production and reproduction of counterfeit products and ensures that all information about the originality of the digital asset, from the previous owner and manufacturer, is available.


REFERENCES:

bottom of page