From digital art and published columns, to sports highlights, viral photos and even memes, NFTs can take the form of virtually any type of online content and these irreplicable tokens have skyrocketed in popularity.
Simply put, a non-fungible token is a one-of-a-kind asset that lives online and is managed in a digital ledger.
These digitally unique assets are attached to a distinct value with a certificate of authenticity, so even though it exists online, the asset can't be easily and endlessly duplicated. That's because each NFT exists on decentralized digital platforms based on blockchain technology. Transactions on a blockchain platform are written to a digital ledger. That ledger publicly records every NFT transaction to confirm the item's ownership.
Blockchain supports replicable tokens including Ethereum and other cryptocurrencies -- which were once viewed as unstable and confusing, but have seen a meteoric rise among those ready to embrace the digital alternatives to traditional currency.
"NFTs can't be duplicated or copied, they're verifiably scarce," said Decrypt editor-in-chief, Daniel Roberts. "All it really means is that it can't be divided, duplicated, subbed one-for-one."
Merriam-Webster officially defines the three letter acronym as "a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership of a specific digital asset (such as the original version of an online photo or video).
"When a new word makes its way into the world’s lexicon, our ears at Merriam-Webster perk up," Peter Sokolowski, Merriam-Webster’s editor-at-large, said when they announced the new word. "Over the past several months, NFT has rocketed into popular culture, and the team at Merriam-Webster crafted a definition to provide meaning to this emerging technology.”
Why NFTs have become so popular
From graphic designers to street artists-turned-digital creators, NFTs have created a whole new buying and selling platform for the art word.
NFT marketplaces (also known as exchanges) have attracted attention from collectors, investors, celebrities and even chefs. And with the rise in popularity and attention to the crypto-collecting space, artists have capitalized on opportunities to sell their work for huge sums with some investors spending tens of millions on one NFT.
The new medium for collectors through online auctions has also created an opportunity for a more personal connection between buyer and creator.
Plus, content creators can sell their work anywhere and collectors can access the global markets virtually from anywhere.
Where and how can you buy an NFT?
NFTs are purchased through a third-party online marketplace, or NFT exchange.
OpenSea, which was founded in 2018, is the world’s largest digital marketplace for crypto collectibles and NFTs. Other popular sites for NFT transactions include Rarible, Superfarm, Ethernity and more.
While transaction details can vary slightly by site, the blockchain auction will open during alotted times and once the NFT has a winning bid, that site connects with the new owner, usually by sending a verified link to their profile on the site within the marketplace.