What is a NFT?
NFT stands for non-fungible token. It is essentially a collectible digital asset, which holds value as a form of cryptocurrency and as a form of art or culture. Digital artwork is represented as an NFT so it can then be purchased and traded in the market and digitally tracked as it is resold or collected again in the future.
NFTs are bought and sold online, frequently with cryptocurrency. They are generally created on smart-contract enabled blockchains like Ethereum or Solana, however, there is a significant difference between NFTs and the native tokens of those blockchains. NFTs are unique. Each NFT has a digital signature that makes it impossible for it to be exchanged like-for-like, hence “non-fungible”. Each NFT may represent a different underlying asset and thus have a different value. The unique identity and ownership of an NFT are verifiable via the blockchain ledger.
NFTs have been around since 2014, but they are still increasingly gaining popularity in 2021, becoming a progressively favored way to buy and sell digital artwork. An NFT is ‘minted’ from digital objects that represent both tangible and intangible items, including music, videos, gifs, and other art objects.
There are potentially many benefits for video creators and artists in using NFTs as they are a great opportunity to monetize the outcomes of their work without using traditional financial institutions. It’s also possible to program, via smart contracts, perpetual royalties for the original creator on all subsequent sales of an NFT. Some investors also see NFTs as a way to financially support video artists and creators, expand their digital art collections, and participate in a new market experiencing significant growth.