NFT (Non-Fungible Token)

A unique digital token that represents ownership of a specific asset, such as digital art, music, or collectibles.

What is it? - Dummies

Un NFT It's like a single digital token that says that you are the owner of something special: an image, a song, a video game character or even virtual terrain. Unlike digital currencies (which are all worth the same), NFTs They are different from each other, and that is why they can represent unique things.

What is it? - PRO

Un NFT (Non-Fungible Token) It is a type of unique and unrepeatable digital asset which is issued on a blockchain through smart contracts. Unlike the fungible tokens (such as ERC-20), which are interchangeable and homogeneous, each NFT has a unique identifier (TokenID) and specific metadata that differentiate it from the rest, allowing represent the ownership and authenticity of digital or physical assets.

NFTs are built on non-fungible tokenization standards, the most common are:

  • ERC-721: base standard for individual and indivisible NFTs.
  • ERC-1155: allows you to manage both fungible and non-fungible tokens in a single contract (ideal for video games and multiple collections).

Each NFT targets a series of metadata (usually in JSON format), which contain information such as:

  • Name and description of the asset.
  • Link to the image, video or file (stored on IPFS, Arweave or centralized server).
  • Unique attributes (color, rarity, level, etc.).
  • History of ownership and transfers.

NFTs are used in numerous use cases:

  • Digital art and collectibles (e.g. images, illustrations, photography, music).
  • Gaming and metaverses (skins, characters, virtual lands).
  • Documentation and digital identity (certificates, tickets, diplomas).
  • Fractional ownership of real assets (buildings, physical objects).
  • Intellectual Property Tokenization and User Licenses.

One of the key characteristics of the NFT is that its existence on the blockchain guarantees:

  • Verifiable shortage.
  • Demonstrable authenticity.
  • Transferable property without intermediaries.
  • Interoperability between standards-compatible platforms and markets.

However, it is important to note that the NFT It does not store the content, but a pointer to it. Therefore, its legal and functional value may depend on how the contract is structured, the hosting of the metadata and the related rights.

Key points

  • It represents something unique and not interchangeable about blockchain
  • Use standards such as ERC-721 and ERC-1155
  • includes metadata that define the asset and its properties
  • It allows you to certify ownership and digital authenticity without intermediaries
  • It is applied in art, video games, metaverses, identity and more
  • Advantages

  • Certification of authorship and scarcity digital in verifiable environments
  • Ownership without intermediaries, transferable 24/7 in global markets
  • Direct Monetization for Creators with programmable royalties
  • Wide applicability, from art to digital identity and gaming
  • Interoperability with compatible wallets, marketplaces and networks
  • Disadvantages

  • High Speculation and Market Bubbles in some sectors
  • Legal risks regarding intellectual property and rights of use
  • Metadata hosting dependency If it's not well decentralized
  • Sustainability and energy use issues in PoW blockchains
  • Learning curve for new users or collectors
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