How do they work?

NFTs, or non-fungible tokens, are digital files like art, videos, animation, music, etc., that cannot be replaced and are stored on a blockchain to ensure ownership and no fraud. They can be sold to people but the artist retains the copyright which they can also choose to sell. Just like physical art, copies of NFTs can also be acquired, but there will only be one original with the highest value. That makes them collectible assets that hold value, also just like physical art. NFTs are giving artists the opportunity to not have to rely on galleries or auctions to earn off their work, instead selling it directly to the buyer by making it an NFT. 

Art isn’t the only thing being sold as NFTs as we already know. Brands like Taco Bell are making their own themed NFTs to raise money for charity and NBA game clips are also generating a lot of revenue. Even celebrities like Lindsay Lohan, Snoop Dogg, Amitabh Bachhan and Salman Khan are trying to cash on the trend by releasing moments or artwork as NFTs. Madonna recently collaborated with the artist Beeple to work on her ‘Mother of Creation’ NFT project. 

NFTs are secured on cryptocurrency blockchains, usually the Ethereum blockchain, which is a cryptocurrency with its blockchain keeping track of the selling and trading of NFTs. Blockchains are a way of storing data without having to trust any one institution with it, in a way that makes it difficult to hack the system. They are essentially a ledger of transactions and the information stored in blockchains cannot be altered or edited. 

NFTs are changing how art is made, sold and bought and they're becoming more significant with the development of the metaverse. So one thing remains certain, that they will definitely stay relevant for a good while and continue to grow more popular.