Follow us on  Twitter

What are NFTs and how do they work?

What are NFTs?

NFT stands for ‘non-fungible token’. Non-fungible tokens, or NFTs, are digital assets that are stored on the blockchain. They are unique, one-of-a-kind tokens that are not interchangeable with any other token. NFTs are used to represent a wide range of digital assets, including artwork, music, digital collectibles, trading cards, in-game items, and much more.

How do NFTs work?

NFTs are created using smart contracts on a blockchain, such as Ethereum. A smart contract is a computer program that automatically executes a transaction when certain conditions are met. When creating an NFT, a smart contract is used to create a unique token with a specific set of attributes. These attributes can include a unique identifier, the name of the asset, the asset’s owner, and the asset’s current market value. Once an NFT is created, it is stored on the blockchain, which is a distributed ledger that is shared and maintained by a network of computers. The blockchain is used to keep track of the ownership and value of the NFT, as well as to verify all transactions that take place involving the token.

What are NFTs used for?

NFTs and blockchain technology give artists and content producers a special chance to monetize their works. For instance, artists are no longer required to sell their work through galleries or auction houses. Instead, the artist may sell it as an NFT straight to the consumer, allowing them to keep a larger portion of the sales revenue. Additionally, artists may encode royalties into their software so that every time their work is sold to a new purchaser, they will earn a share of the transaction.