What is NFT
Unique Non-Fungible Token
NFT stands for Non-Fungible Token. Simply speaking, NFTs are encrypted crypto assets that can be traced in blockchain and that are identifiable by their unique codes. NFTs are not replicable and thus unique in nature.
Different from fungible tokens such as bitcoins, each NFT is different from another and thus cannot be traded equally between each other. Therefore, people can own these uniquely encrypted digital assets and have traceable proof of ownership.
What is a fungible token? What's its feature? Please refer to the content: What is Fungible Token
A lot of things can be NFTs: pictures, music, videos, essays, and even Twitter posts. Basically anything digitized can be made into NFTs. Most of the NFTs now are considered to be "collectibles" or serve as profile pictures and in-game / metaverse characters.
Currently, NFTs have two main forms: ERC-721 and ERC-1155.
You may ask: why is it necessary to make digital assets non-fungible? Here are two main reasons.
Protect IP Rights
One reason is to protect creators' IP rights. These days, more and more people work online and more digital works are being created. But, even valuable digital arts are hit hard when it comes to intellectual property infringement.
A physical painting can be assessed for forgery by examining the brush strokes. However, individual digital art creators without a big agency with an army of lawyers have a hard time proving their ownership and getting royalties every time their works are resold. To some extent, NFTs help with pirating issues.
Provide Verifiable Proof
Another major reason is providing verifiable proof for important events such as concerts and train rides. Paper tickets are easily stolen and digital ones may be more so. NFTs have a traceable and public transaction history and thus are much harder to lose.
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