What are Non-Fungible Tokens (NFTs)?

About Non-Fungible Tokens (NFTs):

 

• NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
• They can represent digital or real-world items like artwork, photograph, song,  video, real estate, individuals' identities, property rights, and more.
• Thus, NFTs are assets that have been tokenized via a blockchain. They are assigned unique identification codes and metadata that distinguish them from other tokens.
• The term ‘non-fungible’ simply means that each token is different as opposed to a fungible currency such as money (a ten-rupee note can be exchanged for another and so on).
• NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs—it all depends on the value the market and owners have placed on them. 
• NFT transactions are recorded on blockchains, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain. 
• NFTs became popular in 2021, when they were beginning to be seen by artists as a convenient way to monetise their work.

 

What is Blockchain Technology?

• A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. 
• Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
• Decentralized blockchains are immutable, which means that the data entered is irreversible. 
• This means if one block in one chain was changed, it would be immediately apparent it had been tampered with.

 

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Q1) What are Cryptocurrencies?

A cryptocurrency is a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

Source: Google unveils NFT policy for Play Store to incorporate tokens into games