Non- Fungible Tokens (NFTs) transform digital artwork and other collectibles into unique, verifiable assets, which can be traded on the blockchain. Digital Assets (NFT Utility Value), which are tokenised on the blockchain, provide a distinct (decentralised) indication of the ownership of an asset, the owner’s identity as well as governance & access rights. As a matter of fact, buying an NFT makes you a distinct owner of the Digital Asset, verifiable through your public on-chain address. Moreover, the unique identity and ownership of an NFT is verifiable via the blockchain ledger, giving it a unique value. In fact, the concept behind NFTs is about creating scarcity and shortage in the flood of the seemingly infinite supply of virtual items. Accordingly, NFTs bring the promise of creating a “digital original” that is one of a kind and can be clearly attributed to the respective owner.
Summary
Nonfungible tokens are a blockchain-based, programmable deed of ownership to an asset. This digital deed gives its holder the exclusive ability to use, sell and transfer the asset’s ownership rights, as dictated by their private key signature. These rights could pertain to resale, physical redemption, digital functions, financial benefits or other intangible rights. The NFT does not necessarily “contain” the asset but rather is a programmable record of ownership with an inbuilt pointer to the asset location.
References:
- See “The Non-Fungible Token Bible: Everything you need to know about NFTs”, Devin Finzer, OpenSea, Jan 10, 2020
- See “What Is a ‘Semi-Fungible’ Crypto Token?” Anatol Antonovici, Nasdaq, Aug 17, 2021
- See “The Non-Fungible Token Bible: Everything you need to know about NFTs”, Devin Finzer, OpenSea, Jan 10, 2020