Non-Fungible Token (NFT)
A Non-Fungible Token (NFT) is a type of cryptocurrency asset on the blockchain. Unlike fungible tokens, which are interchangeable and can be exchanged for other tokens of equal value, an NFT represents a unique digital item with its own distinct set of characteristics. This makes it impossible to replicate or exchange in the same way as traditional cryptocurrencies such as Bitcoin or Ethereum. Each NFT has its own individual identity that cannot be changed and is permanently stored on the blockchain.
The most common use case for NFTs is to represent ownership over digital assets like artwork, music, videos, in-game items and collectibles. By tokenizing these assets onto the blockchain they become immutable and secure from theft or duplication – allowing users to own their favorite works forever without fear of them being taken away or copied by someone else. Additionally, since each token is unique it also allows buyers to purchase exclusive rights over certain pieces of art at a premium price compared to regular prints/copies which have no scarcity value attached to them.
Because all transactions involving NFTs are recorded on the public ledger they also allow creators to track how often their works are sold/transferred between buyers – enabling them to better understand usage patterns around their creations while collecting royalty payments directly from any subsequent sales made down the line without having any third party involvement whatsoever (e.g., publishers).
In addition, some platforms support smart contracts associated with each tokenized asset – allowing developers & creators alike more control over what happens when one user sells/transfers an item to another – thus providing further security & flexibility within this new digital economy ecosystem we now live in today!
