What is NFT?

Introduction

A non-fungible token (NFT) is a unique digital asset that exists on the blockchain. The most popular examples of NFTs are crypto kitties, but there are many other uses for them as well. In this article, we will discuss what NFTs are and how they differ from other types of cryptocurrencies.

What is a Non-Fungible Token?

The best way to understand NFTs is to think of a physical collectible.

For example, say you were in the market for a rare Beanie Baby—say, the “Teal Peanut.” You could buy one on eBay, but there’s no guarantee that the item you receive will be 100% authentic. In fact, it could be fake and worthless.

But what if there was a way to buy and sell virtual copies of this same Beanie Baby? Instead of having just one original “Teal Peanut,” there’d now be thousands—each with its own unique attributes: color variations, tags reading different things (“Made in Japan” versus “Made in Taiwan”), etc. And each copy would have value because of those differences; for example, maybe your copy has an extra tag or some other distinguishing element that makes it more special than another version out there somewhere else!

How Do NFTs Work?

A non-fungible token is a digital asset that is unique, indivisible, and can’t be duplicated. It’s registered on a blockchain.

An NFT doesn’t represent ownership of anything physical, but rather it represents something else; most often virtual items such as cryptocurrencies or in-game assets like tokens or avatars.

In the case of CryptoKitties for example, a cat can be represented by an ERC721 token which means that no one else owns the same cat as you do (and if they did, it wouldn’t be yours anymore).

Is it possible to create NFTs?

It’s possible to create your own NFT. In fact, you can use the same tools that creators of ERC-721 tokens use.

If you want to create an NFT, you’ll need to understand a few things first. First and foremost, your token will have to be built on top of the Ethereum blockchain; that means it needs an ERC-20 token standard built onto it as well.

Additionally, although they’re often confused with each other by beginners in the cryptocurrency space (and even some experts), there are some important differences between these three types of tokens:

  • ERC 721 is used primarily for collectibles like digital art or toys
  • ERC 20 was created specifically for Decentralized Apps (DApps)
  • ERC 1155 focuses specifically on gaming

Conclusion

They have the potential to revolutionize the way we think about art and ownership, but there are also some real concerns over how this type of technology could be misused by corporations who want profits from your creations without giving anything back in return.. We will continue to watch this space with interest!