NFT, which is an abbreviation for Non-Fungible Token, is a digital asset created with blockchain technology that represents ownership, authenticity, and provenance of a tangible or intangible item.

Five Facts About an NFT

The above definition brings out five facts about an NFT:

1. NFT is a Digital Product

Being digital means that you can see an NFT and hear its sounds, but you cannot hold it with your physical hands.

2. NFT Represents an Item

NFTs are not just abstract objects; they represent ownership, authenticity, and provenance of tangible or intangible items.

This means you can turn your imagination (intangible item) into an NFT, thereby conferring your ownership rights over such imaginative creativity.

In the same way, you can convert your physical asset, such as your house, into an NFT, thus giving the NFT the legal right to represent or not to represent your house.

3. NFT is a Programmed Product

NFTs are produced using blockchain technology. The production process allows specific characteristics to be programmed into an NFT.

Thus, programmability refers to the ability to embed rules and automated functions within an NFT using smart contracts. These rules and functions have been discussed in various sections of this book.

Programmability means that creators can design NFTs to perform specific actions beyond simple ownership transfer. This is one of the beauties of NFTs.

4. NFT is a Definite Item

By passing through a blockchain, an NFT takes up unique characteristics that differentiate the NFT from any other NFT, as well as the item from which it was created.

Thus, an NFT is not an abstract material but a definite piece of item with definite uniqueness, which was endowed upon it by its Creator and the blockchain technology.

5. NFT is an Asset

Since it is a definite product created from an existing item, it means an NFT can be a valuable product that can have a definite financial value. In other words, an NFT is an asset with monetary value.

Indeed, NFTs can be traded and can be sources of income for their Creators, Owners, and Traders.