Non-fungible tokens or NFT is any content stored on a blockchain. This makes it attain key features of cryptocurrencies - traceability and security.
Many people have a difficult time understanding NFTs. How is it possible to pay €59 million for an image that one could download within a few clicks, for free?
While it is true that you could easily download any NFT that sold for millions of dollars, the same could be said of any artwork. With modern printers, reproduction could be made that is visually indistinguishable from the original. This is when the similarity breaks apart. An NFT goes beyond being a reproduction of an asset - audio, video, image, text. Instead, NFT stamps authenticity and ownership on the media that has been tokenized.
In other words, blockchain imbues digital assets with its properties - immutability, traceability, decentralization, and enhanced security. After all, blockchain is composed of a network of nodes, and across thousands of those nodes, your NFT is secured. It can be accessed and traded the same way as you would access any cryptocurrency - with a private key.
This alone makes the content contained within the NFT more secure than the toughest vaults. Minted by smart contracts on NFT marketplaces, they are then resistant to falsification, and its ownership can be tracked as long as the blockchain network exists.
Some of those networks are Ethereum, as the largest one, alongside Binance Smart Chain, Polkadot, and Polygon. The most common usage of NFTs mirrors that of the world of art galleries. They are tokenized artworks, in the same category of speculative assets. However, there are many other uses for NFTs. They could be used for branding purposes, as it happened with Mark Cuban's Dallas Mavericks for game tickets.
Artists and songwriters can use NFTs as a funding vehicle. For example, the Kings of Leon music band gained over €1.6million in sales when they minted their album "When You See Yourself." Likewise, indie game studios can take advantage of NFTs to fund their projects. In such a way, Bear Games studio raised €85k for their BEAR NAVY Vs. Pirates (BVP) game.
Even large conglomerates, such as Nike, Mattel, Chipotle, Funko, and Warner Music Group have started to dabble in NFTs. Considering its explosive growth in recent months, it is difficult to find fault in their strategy.
As it stands, the most popular marketplace to trade in NFTs are Rarible.com, OpenSea.io, and SuperRare.com. All of them are hosted on the Ethereum blockchain, meaning that one would have to use ETH to pay for transactions and fees.