NFTs stand for Non Fungible Tokens.
Beauty lies in the eyes of beholder, and thus each NFT holds a unique value.
Your standard 100$ Fiat note, or Crypto asset, is fungible, that is even if two friends exchange 2 100$ bills, the value exchanges remains same, or consistent.
But when you exchange a Ronaldo signed jersey with your friend’s Messi signed jersey, appreciation & recognition for them, i.e. “value” starts to differ.
image courtesy: 8bituniverse.io
Define NFTs:
Digital assets, stored on the blockchain, modelled on the principles of Uniqueness, Rarity and Authenticity - through proof of ownership; a digital record on the blockchain.
NFTs can be bought, sold, flipped ( traded ) over multiple blockchain networks. NFTs being present only on ETH network is a myth. Networks hosting / supporting NFTs include include Flow, Tezos, Polygon, Solana, Avalanche, Binance Smart Chain, WAX, Waves, and Tron
( link redirects: DApp Radar)
How do they work?
Art in any form is exclusive, rare and holds a high regard. This art piece however has the risk of being damaged, being forged, being tampered or manipulated with, among others. NFTs enable “digitising” this art, or leveraging the potential of Blockchain Technology to make your art tamper proof, irreplaceable and avoid duplication or creation of multiple copies.
In a nutshell, Single Art » Single Owner + Defined ownership + record of purchase.
Popular NFT platforms