NFT

A non-fungible token, often referred to as an "NFT," is a unique digital asset that is part of a blockchain, usually the open-source Ethereum. It is primarily used to verify ownership of digital artwork sold and collected online.

NFTs increased in usage in 2020, partially because the Covid-19 pandemic limited the exchange of actual artwork. They are a form of currency on a blockchain, which is a type of database linked together like a chain using cryptography.

Blockchains provide helpful information about transactions that cannot be modified. They are also transparent, allowing users to view the transactions and recognize ownership of assets.

An NFT, which is part of a blockchain, functions similarly to a receipt that provides proof of a digital asset's purchase and ownership. Anything digital can be sold and collected as an NFT, but an NFT is primarily an image or video artwork.

Examples of NFTs

NFTs may be anything digital that a person wants to own, such as a unique graphic created by a popular artist, a digital holographic Charizard Pokemon card, animated stickers, a 15-second highlight of LeBron James dunking a basketball, or a rare digital baseball card. It can even be something as simple as a tweet.

Since the medium in which NFTs are created makes them so easily reproducible (users can simply and legally download the images and videos onto their own computers) many people scoff at the idea of purchasing NFTs. However, that hasn't stopped art collectors from purchasing NFTs, sometimes for millions of dollars.

Reasons for purchasing NFTs

Some reasons for shelling out big chunks of change for NFTs include ownership bragging rights (although the artist still holds the copyright and reproduction capabilities), supporting artists they admire, and a belief that the asset will appreciate as cryptocurrency increases. Another reason may just be pure stupidity, but hey, to each their own.