Owners can also add metadata or attributes pertaining to the asset in NFTs. NFTs also contain ownership details for easy identification and transfer between token holders. They are also extensible, meaning you can combine one NFT with another to “breed” a third, unique NFT.
They are digital representations of assets and have been likened to digital passports because each token contains a unique, non-transferable identity to distinguish it from other tokens.
NFTs shift the crypto paradigm by making each token unique and irreplaceable, thereby making it impossible for one non-fungible token to be equal to another. Like physical money, cryptocurrencies are fungible i.e., they can be traded or exchanged, one for another: this fungibility characteristic makes cryptocurrencies suitable for use as a secure medium of transaction in the digital economy.
Much of the current market for NFTs is centered around collectibles, such as digital artwork, sports cards, and rarities.Ĭuriosity: Twitter's Jack Dorsey tweeted a link to a tokenized version of the first tweet ever written where he wrote "just setting up my twttr." The NFT version of the first-ever tweet has already been bid up to $2.5 million. Because they are based on blockchains, NFTs can also be used to remove intermediaries and connect artists with audiences or for identity management. The distinct construction of each NFT has the potential for several use cases.
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