What is an NFT?
NFTs, or non-fungible tokens, are unique digital assets that are stored on a blockchain and cannot be exchanged at equal value. Unlike cryptocurrencies, which are identical to one another, NFTs have distinct identification codes and metadata that set them apart from each other.
They have various applications, such as digitally representing physical assets like real estate or artwork, connecting artists with audiences, and facilitating identity management. NFTs also contain ownership details and can have additional metadata, such as fair trade labels for coffee beans or artist signatures on digital artwork.
They were developed through the ERC-721 and ERC-1155 standards, which define the minimum requirements for their exchange and distribution. While cryptokitties, a popular use case for NFTs, may seem trivial, they have been used for more serious purposes such as private equity transactions and real estate deals.
The versatility of NFTs also allows for escrow in different types of NFTs in a single financial transaction.
