What is an NFT?
An NFT is, in essence, a collectible digital asset, which holds value as a form of cryptocurrency and as a form of art or culture. Much like art is seen as a value-holding investment, now so are NFTs. But how?
First, let's break down the term. NFT stands for non-fungible token – a digital token that's a type of cryptocurrency, much like Bitcoin or Ethereum. But unlike a standard coin in the Bitcoin blockchain, an NFT is unique and can't be exchanged like-for-like (hence, non-fungible).
So what makes an NFT more special than a run-of-the-mill crypto coin? The file stores extra information, which elevates it above pure currency and brings it into the realm of, well, anything, really. The types of NFTs are super-varied, but they could take the form of a piece of digital art or a music file – anything unique that could be stored digitally and be thought of to hold value. Essentially, they are like any other physical collector's item, but instead of receiving an oil painting on canvas to hang on your wall, for example, you get a JPG file.