An NFT, or Non-Fungible Token, is a unique digital asset that represents ownership or proof of authenticity of a unique item or piece of content, primarily using blockchain technology, which is the same technology that underpins cryptocurrencies like Bitcoin and Ethereum. Unlike fungible tokens, such as Bitcoin, where each token is identical and can be exchanged on a one-to-one basis, non-fungible tokens are distinct and cannot be exchanged on a like-for-like basis. This uniqueness and the inability to replicate or interchange them is what makes NFTs particularly valuable for digital collectibles, artwork, music, videos, virtual real estate, and other digital goods. Each NFT has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). NFTs have gained significant popularity as a way to buy and sell digital artwork, with some NFTs selling for millions of dollars. They are also being explored for use in various applications such as identity verification, licensing, and certificate authentication. The rise of NFTs has sparked discussions around the value of digital ownership and the environmental impact of blockchain technology, as the process of creating and trading NFTs often requires significant computational power.
