“NFT” has become a common acronym in social media. It stands for Non-Fungible Token. Many Americans talk about it, but not many of us clearly understand its meaning and how it works. Investors keep their eyes on NFTs, and artists explore possibilities. The value of NFTs sounds too good to be true for artists.
Before delving into the dilemma of artists, let me define the term “non-fungible”.
Fungible means identical and interchangeable, whereas non-fungible means unique.
In a nutshell, technically, an NFT is a unit of data stored in a blockchain, which is a digital ledger. This ledger certifies the uniqueness of the item. When an item is created as an NFT, blockchain establishes a string record with a cryptographic hash verifying identifiable data blocks to be unique.
In simple terms, NFTs can be defined as unique digital assets. Therefore, the item must be one-of-a-kind.
A cryptographic transaction process maintains NFT ownership. This process includes a digital signature of the owner kept in the blockchain.