Non-Fungible Token Definition | What Is NFT

Learn what NFT is, why NFTs are important, examples of NFT, and how does NFT work. Also, learn whether non-fungible tokens (NFTs) are safe to buy.

What does NFT mean?

NFT is a non-fungible token. It’s a digital asset that digitally shows real-world objects like art, music, games, and videos. These digital tokens are bought & sold online in exchange for cryptocurrencies. It’s based on blockchain technology and comes with unique identification codes that separate each NFT identity. NFTs can’t be traded like cryptocurrencies, but they can be bought/sold. 

How does NFT work?

NFTs are based on blockchain technology, and it’s a distributed public ledger that records transactions. 

These NFTs are created or minted from digital objects and form in different items like:

  • Arts
  • GIFs
  • Videos
  • Collectables
  • Virtual Avatars
  • Music
  • Sneakers
  • Many more…

In simple words, NFTs are digital forms of any real-world item. Users can own the ownership of that digital item because each NFT comes with a unique data address to verify the ownership and can be transferred from one to another owner.

NFTs are based on blockchain, and it’s a special kind of database that stores data in blocks. These groups have limited capacity, and once they become full, new data goes to the new block. For example, whenever any NFT owner sells the NFT to a new owner, its new ownership information is saved to another separate block to remain permanent record secure. 

These NFTs are borderless and easy to create and transfer ownership because of unique identifiers for each NFT. 

Why are non-fungible tokens (NFTs) important?

NFTs have become the future of ownership and trading of digital assets. A person can have complete ownership, from event tickets to properties, in tokens. 

But its Importance depends on its users. Some NFTs are used for ownership and monetizing digital artworks. It’s also used to create decentralized marketplaces and economics. 

NFTs come with special features, including:

  • Unique: Each NFT comes with a unique identification that shows ownership of the token. Whenever any NFT owner sells the NFT to another person, its ownership transfers to another owner securely.
  • Indivisible: NFTs can’t break into smaller parts, or you can’t buy a portion of the NFTs.
  • Ownership: NFTs come with ownership
  • Fraud Proof: Anyone can easily transfer these NFTs to another owner without being affected by fraud. 

What are some examples of Non-fungible tokens (NFTs)?

NFTs are secured to buy because it’s based on blockchain technology that gives complete ownership of NFTs. There are tons of amazing examples of unique NFTs:

1. Beeple’s “Everydays: The First 5000 Days”

It’s the first NFT digital artwork that has been sold at a major auction house with a price of $69 million.

2. William Shatner’s memorabilia

It’s a famous actor who has spent more than 60 years in the industry. William Shatner released a series of personal memorabilia NFTs that shows his beautiful career journey, and he sold around 125,000 units in 9 minutes.

3. Grimes releases WarNymph

One of the Popular artists, Grimes made $5.8 million in minutes by selling her NFTs. A collection of 10 beautiful NFTs titled “WarNymph” sold amazingly.

4. Nyan Cat GIF

Nyan Cat is one of the Popular artifacts of the 2010s. And they decided to make an NFT, and this NFT was sold at 300 ETH.

5. Jack Dorsey’s first-ever tweet

Twitter’s CEO, Jack Dorsey, sold his first tweet on the platform by making it NFT for $2.9 million.

6. Sports Collectibles: NBA shots

Top Shot is one popular NFT marketplace where basketball fans can buy, sell and trade NFTs. LeBron is one of the most trending collections, which sold over $387,000.

7. CryptoKitties

CryptoKitties are similar to Pokemon cards, but they’re based on Ethereum Blockchain. It’s the first blockchain-based game.

8. Furniture NFTs

Andres Reisinger sells furniture NFTs that people use in the open world like Decentraland or Minecraft. 

These are some most popular NFTs examples.

Are non-fungible tokens (NFTs) safe to buy?

Like cryptocurrencies, it’s safe to buy and own NFTs, but it probably comes with risk. You should be clear that your NFT comes with complete ownership, and nobody can steal this NFT from you, but if your NFT loses value in upcoming years, it may not be getting good returns as per your investment. But if you’re buying for your interest or having an NFT, you can go for it without any worry.

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