futuristic word cloud about NFT, non fungible token, crypto art (3d render)
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What is an NFT?
NFT is short for non-fungible token. NFTs are digital representations of assets and have been likened to digital passports because each token contains a unique identity.
An NFT is unlike a bitcoin in the sense that it cannot simply be replaced with an identical NFT once traded away. They can be exchanged similarly to how bitcoins work and are in fact on their own separate blockchain, the Ethereum blockchain.
Typically, you’ll see them represented by a digital file, like a piece of art or music. (You may have even seen the celebrity Paris Hilton and late night host Jimmy Fallon showing off their own NFTs — two unique paintings depicting a bored chimpanzee.)
However, according to journalist Mitchell Clark with the tech website the Verge, what’s actually the NFT is the record on the blockchain itself that stores the information about that file, who’s bought it, traded it and currently owns it, etc.
Some people use NFT’s as a way to sell or acquire digital art. For example, the pop musician Grimes reportedly made $6 million last year from people bidding on a collection of digital art work NFTs. Others, like Twitter founder Jack Dorsey, put an autographed tweet up for sale as an NFT.
This story was originally published April 21, 2022 10:00 AM.
