WHAT ARE NFTs?
DEFINITION
NFTs (or “non-fungible tokens”) are a special kind of cryptoasset in which each token is unique — as opposed to “fungible” assets like Bitcoin and dollar bills, which are all worth exactly the same amount. Because every NFT is unique, they can be used to authenticate ownership of digital assets like artworks, recordings, and virtual real estate or pets.
How Can I Use NFTs ?
You can think of NFTs as being kind of like certificates of authenticity for digital artifacts. They’re currently being used to sell a huge range of virtual collectibles, including:
Virtual Trading Cards
Music
Video Art (including audio)
Exclusive Redeemables
Virtual Real Estate
Deeds to a car
Tickets to a real world event
Tokenized invoices
Legal documents
Signatures
Each NFT is stored on an open blockchain (often Ethereum’s) and anyone interested can track them as they’re created, sold, and resold. Because they use smart contract technology, NFTs can be set up so that the original artist continues to earn a percentage of all subsequent sales.
Fan Engagement
NFTs can be much more than a collectible or piece of art. NFTs can better connect fans to their favorite teams or brands by offering voting rights to team decisions, access to exclusive offers, and the ability to earn rewards.
New Potential Revenue Streams
Because NFTs enable digital scarcity, brands can sell exclusive, limited digital goods. Unlike physical goods, NFTs can include a smart contract that codes in a royalty percentage designated by the content creator. As such, subsequent sales or auctions of the NFT can generate revenue for the original NFT creator, providing an ongoing potential revenue stream as it is sold or auctioned
The NFT world is relatively new. In theory, the scope for NFTs is anything that is unique that needs provable ownership. Here are some examples of NFTs that exist today, to help you get the idea: