What is a non-fungible token?

A non-fungible token is a digital asset verified using blockchain technology. It relies on a network of computer-recorded transactions, giving buyers proof of authenticity and ownership. The current NFT boom mainly comprises digital assets, including GIFs, images, songs, and videos.

As mentioned earlier, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin. But its blockchain also supports NFTs, which store additional information that makes them work differently from other digital currencies. Do keep in mind that other blockchains can implement their own versions of NFTs.

When did NFTs become a buzz?

The technology that makes NFTs have been around since the mid-2010s. But it went mainstream in late 2017 with CryptoKitties, a site that allowed people to buy and “breed” limited-edition digital cats with cryptocurrency.

How big is the NFT market?

The value of the NFT market grew by 299% in 2020, according to the NFT Report 2020 published by L’Atelier BNP Paribas and Nonfungible.com (source: The New York Times).

What makes NFTs so popular?

Tech experts agree that some of the NFT buzzes are just another hype. They argue the cryptocurrency world is plentiful of get-rich-quick tricksters and scammers. Another group of NFT detractors points to the enormous amounts of energy and computing power that NFTs and other cryptocurrencies need to work. They say it’s an environmental hazard.