What is an NFT?

Monday, Oct 18, 2021| Tags: nft

Non-Fungible Token

A Non-Fungible Token (NFT) is a non-replaceable digitally protected object. It is based on a stored string of characters that - unlike a Fungible Token - cannot be exchanged or copied. The technique is used, for example, to mark digital files such as memes or computer-generated artworks as unique pieces. The analogy in non-digital life for the NFT would be, for example, the Mona Lisa, which cannot be replaced because it only exists once, and for the Fungible Token, for example, a 2-euro piece that can be replaced at any time by another 2-euro piece.

Non-fungible tokens are used wherever they can be assigned to virtual goods, i.e. digital art, music or individual objects in computer games, especially in decentralised applications, in the same way as a label and can thus be collected and traded like the unique objects themselves. As a rule, the trading platform on which the artworks are offered assigns object and token to each other. Unlike the tokens themselves, which are stored in countless copies in the public blockchain, this private register can perish or disappear from the network with the server.

NFTs are offered by many blockchain projects. The blockchain most commonly used for NFTs is Ethereum.

The NFT does not automatically transfer all rights of use to the copyrighted work. The respective legal meaning of an NFT transfer is determined individually and privately autonomously by the contracting parties and may vary depending on the contract design; in particular, it may only cover individual types of use.

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