What are NFTs?
Non-fungible tokens, often referred to as NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content, or media. An NFT can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical.
What are the key characteristics of a non-fungible token?
Non-fungible tokens (NFTs) are designed to be
i) cryptographically verifiable,
ii) unique or scarce and
iii) easily transferable.
Leveraging cryptographic signatures native to the blockchain on which an NFT is issued, one can easily determine the origin and the current owner of the asset in question in seconds.
Common Features of NFTs are as below:
• Unique – Each NFT has a unique property usually stored in tokens metadata. NFTs are unique in their character, and no two NFTS are the same. On the contrary, an original image jpg file is the same as its copy, a .jpg file.
• Digitally Scarce resource – NFT is stored in the blockchain network. Hence, the certificate of ownership is available on multiple networks, making it possible to prove digital asset’s ownership.
• Indivisible – Most NFTS cannot be split into smaller denominations; you cannot buy or transfer a fraction of NFTS.
• Ownership – These tokens guarantee the ownership of the asset transferred.
• Fraud proof – They are easily transferable and fraud-proof.
Non-fungible tokens are unquestionably one of the most important developments in internet commerce. Furthermore, their benefits have become attractive selling factors for a variety of consumers. While the benefits of non-fungible tokens obviously point to a bright future for them, it’s vital to be aware of their limits.
The lack of rules and a standardized, universal infrastructure for NFTs, for example, presents several barriers to their implementation.