What are non fungible tokens (NFTs)?
NFTs are an asset that cannot be imitated, in the digital world that is compared to selling any other type of asset or property, but in an intangible form (soft technologies). These tokens can be seen as certificates of ownership of virtual or physical assets.
How do they work?
With NFTs, different digital files can be tokenized to create a digital certificate of ownership that can be bought and sold. As with cryptocurrencies, a record of who owns what is stored on the shared ledger such as the blockchain.
The records cannot be falsified because this “ledger” is securely maintained by thousands of computers around the world
NFTs can also contain Smart contracts that could provide the artist with, for example, a share of a future sale of the token.
In many cases, artists retain the copyright to sell copies of those works and thus continue to sell. But for a buyer of an NFT who holds the token, it proves that he is the original owner of the work. Some people compare it to buying a copy signed by the author.
In theory, anyone can tokenize their work to sell it as an NFT, but interest has grown following reports of multimillion-dollar sales.
In this way, everyone can give “value” to NFTs simply because they believe it is valuable, which is why there are multimillion-dollar sales. In addition, they have the following characteristics:
- Strangely unique
- Non-interoperable
- Indivisible
- Indestructible
- Absolute property
- Verifiable
Understanding the basics of NFTs is one of the first things we must do to learn more and more about them.
