What is an NFT and how does it work?

An NFT, or nonfungible token, is a type of digital asset that is stored on a blockchain. Unlike other digital assets, such as cryptocurrencies, NFTs are unique and cannot be exchanged for one another at a fixed value.

NFTs are created using smart contracts, which are selfexecuting computer programs that automatically enforce the terms of an agreement. Smart contracts on a blockchain can be programmed to create and manage unique digital assets, such as NFTs. Each NFT is assigned a unique identifier that is stored on the blockchain, along with information about the asset it represents.

NFTs can be used to represent a wide variety of digital assets, such as artwork, music, videos, or virtual real estate. They are often sold and traded on NFT marketplaces, where buyers can bid on or purchase them using cryptocurrency.

Because each NFT is unique and can represent a oneofakind digital asset, they have become popular among collectors and enthusiasts in various industries. NFTs also provide a way for creators to monetize their digital creations and maintain control over the distribution of their work.