Non-fungible token - a digital asset on the blockchain

A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright.

NFTs are created when blockchains string records of cryptographic hash, a set of characters identifying a set of data, onto previous records therefore creating a chain of identifiable data blocks

Ownership of the NFT is often associated with a license to use the underlying digital asset, but generally does not confer copyright to the buyer: some agreements only grant a license for personal, non-commercial use, while other licenses also allow commercial use of the underlying digital asset.

Digital art was an early use case for NFTs, because of the ability of blockchain technology to assure the unique signature and ownership of NFTs

Distinct from Digital Art, a new form called Generative Art incorporates algorithms developed by the artist that generate on-demand unique pieces when the token is minted

NFTs can also be used to represent in-game assets, such as digital plots of land, which are controlled by the user instead of the game developer (virtual economy). NFTs allow assets to be traded on third-party marketplaces without permission from the game developer. In February 2021, Axie Infinity recorded a sale of $1.5 million for digital land titles in a single sale.

Blockchain and the technology enabling the network have given the opportunity for musicians to tokenize and publish their work as non-fungible tokens.

NFTs have also been used in spectator sports. in September 2019, NBA player Spencer Dinwiddie tokenized his contract so that others can invest into it. In addition, Dapper Labs, a blockchain technology-based company, has collaborated with the NBA to create "N.B.A Top Shot", a marketplace for digital highlight clips.

Beyond the tokenization of a digital asset, new utilities on non-fungible tokens are emerging.

In fields such as notarization and attestation, the Singapore Government will issue digital certificates for graduates using OpenCert that number 10,000 certificates a year to automate the 2,000 verification requests per year from employers and other schools. The Singapore Ministry of Health will also issue digital Vaccination Certificates for travel using OpenCert.

Rules of access that grant rights to redeem intangible value is a rapidly growing utility. Community NFTs such as "Bored Ape Yacht Club" and "Pudgy Penguins" entitles token holders to benefits, including membership entry to a private Discord server by validating the NFT exists in the wallet against entry.

Ownership of an NFT does not inherently grant copyright to whatever digital asset the token represents.

ERC-721 was the first standard for representing non-fungible digital assets on the Ethereum blockchain. ERC-721 is an inheritable Solidity smart contract standard, meaning that developers can create new ERC-721-compliant contracts by importing it from the OpenZeppelin library

The FLOW blockchain which uses proof of stake consensus model supports NFTs, for example NBA Top Shot is run on the FLOW blockchain. Cryptokitties plans to switch from Ethereum to FLOW in the future

Tezos is a blockchain network that operates on proof of stake and supports the sale of NFT art

The Solana blockchain also supports non-fungible tokens

The first one-off NFT was created on May 3, 2014, by Kevin McCoy and Anil Dash, live at the Seven on Seven conference at the New Museum in New York City. (2021-04-02) Dash NFTs Weren't Supposed To End Like This


Storage off-chain

Environmental concerns

Plagiarism and fraud

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