Non-fungible token is a unit of data stored on a blockchain representing such digital assets as photos, videos, audio, and other types of digital files. The blockchain that stores the asset certifies it to be unique, giving the owner a certificate of ownership. They can, however, be further bought and sold – with each successive transaction duly recorded in the blockchain.
The various digital assets that can be saved on blockchain include digital art, games, music, film, memes and sports, and other assets.
It is vital to note that NFT is merely a proof of ownership and not a copyright. As a matter of fact, the creator of a digital asset is free to make more NFTs of the same work while possessing copyright of the asset. The ownership of NFT can be cross-checked on the blockchain ledger.
Though both bitcoins and NFTs work on the same technology of blockchain, there is a key difference between the two. Bitcoin is interchangeable while NFT is not, and hence it is called non-fungible. Also, each bitcoin has the same value at one point of time, but the NFT’s price depends on the price of the underlying asset, so each NFT is priced differently.
NFTs that made waves
In 2021, interest in NFTs surged all of a sudden. On March 11, a digital artwork ‘Everydays: The First 5000 Days’, made by Beeple, became the first NFT to be listed at Christie’s auction house when it was bought for a whopping $69.3 million. A few days later, Jack Dorsey, Twitter’s founder, sold an NFT with his first tweet for $2.9 million.
Likewise, whistleblower Edward Snowden’s artwork ‘Stay Free’ sold for $5.4 million in April this year. Similarly, in June this year, an NFT of the source code of World Wide Web was sold for $5.4 million during an auction by Sotheby’s in London.
To summarise, NFT is a blockchain-supported proof of authenticity for a digital asset such as music, art, meme, tweet, code, movie, and others. And it is not meant to be confused with a copyright which is a legal right over an asset.