DeFi 10115 August 2021

What Are NFTs And Why Are They Worth Millions Of Dollars?

NFT's - What are They?

Summary

  • What is an NFT
  • How it is stored

In March 2021, a digital-only art piece was sold for a whopping $69 million, with the winning bidder only taking home a digital certificate as proof of ownership of the token. This digital token is referred to as an NFT.

An NFT is an acronym for Non-Fungible Asset, a digital asset that cannot be interchangeable, unlike fungible assets. NFTs are one-of-a-kind digital assets bought and sold as you would other pieces of property. However, because they are digital assets, they do not come in tangible form.

When you buy an NFT, you get a digital certificate of ownership for the virtual asset. As it is with cryptocurrency ownership, the record of who owns an NFT is stored in a blockchain. These records cannot be changed or forged because of the security network maintaining the blockchain.

Like famous paintings, the value of an NFT is determined by the popularity of the piece and the value people place on it. Otherwise it would be a series of 1's and 0's worth absolutely zero!

Kibet Elikana
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