What are NFTs?
You’ve probably been hearing about NFTs a lot recently and seeing them everywhere. So, what are NFTs exactly?
To start with, NFT stands for Non-Fungible Token. NFTs turn your digital assets to one of a kind by creating a unique digital signature, which defines the ownership of your assets and can be bought and sold for real money or cryptocurrency.
Each NFT is unique. So, if you have an NFT you can not really exchange it with another one because each and every NFT have their own value. This means that NFTs are not interchangeable. Each NFT represents a unique asset owned by a specific individual.
So, what makes NFTs different from other cryptocurrencies like bitcoin?
The fact that NFTs are non-fungible tokens. Bitcoin and Ethereum are fungible tokens, which means if you exchange bitcoin for ethereum of the same value. On the other hand, NFTs are of unique value as we said. Thus, if you trade it with another NFT, you will end up with something different in your hands with a different value.
NFTs have a digital signature just like paintings, making it easier to identify the original and the copies. A NFT winds up having that through a blockchain where the information is recorded. So, the blockchain contains the information of who owns the digital asset, who sold it and when it was sold. This information is also encrypted to ensure the authenticity of the NFT. This brings us to the most important part. NFTs have fixed one of the biggest and most difficult problems that digital creators face on the internet.