The NFTs (non-fungible tokens) are not something really new, they were here with us starting the ICO craze in 2017, but somehow, after 2020, they have started a new, upgraded life, and are considered as one of the next big things. They are a breed of unique digital assets — non-fungible, which are different from regular cryptos which are fungible (one can easily be replaced with the others). What is hard to digest for most of us is how these digital assets which range from art and music to in-game assets and luxury fashion, are selling like high-priced diamonds, sometimes in the range of hundreds of thousands, and even millions of dollars.
Well, the million-dollar question is … what is an NFT? Anybody can perform a short Google search, and will see the definition by Wikipedia: “A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. Because each token is uniquely identifiable, NFTs differ from most cryptocurrencies, such as Bitcoin, which are fungible.
NFT ledgers claim to provide a public certificate of authenticity or proof of ownership, but the legal rights conveyed by an NFT can be uncertain. NFTs do not restrict the sharing or copying of the underlying digital files, do not necessarily convey the copyright of the digital files, and do not prevent the creation of NFTs with identical associated files.
NFTs have been used as a speculative asset, and they have drawn increasing criticism for the energy cost and carbon footprint associated with validating blockchain transactions as well as their frequent use in art scams. The NFT market has also been compared to a Ponzi scheme.” But even after seeing this definition, the question comes up again: what is an NFT?