Main menu


Understanding the basics of NFTs and how they work

 Understanding the Basics of NFTs and How They Work

Non-fungible tokens, or NFTs, have taken the world of cryptocurrency and digital assets by storm. Despite their growing popularity, many people are still in the dark about what NFTs are and how they work. In this article, we'll cover the basics of NFTs, including what they are, how they work, and what makes them different from other forms of digital assets.

What are NFTs?

At its simplest, an NFT is a unique digital asset that is stored on a blockchain. NFTs are unique in that they can't be replicated or divided into smaller units. This makes them fundamentally different from cryptocurrencies like Bitcoin, which can be divided into smaller units. The unique nature of NFTs makes them valuable for a wide variety of use cases, such as representing digital artwork, virtual real estate, and more.

How do NFTs work?

NFTs work by leveraging the decentralized and immutable nature of blockchain technology. When an NFT is created, a unique digital signature is assigned to it that is stored on the blockchain. This digital signature, or "hash", is unique to the NFT, making it possible to prove ownership and authenticity.

Once an NFT is created, it can be bought, sold, and traded on the open market. Because the NFT is stored on a decentralized blockchain, the ownership of the NFT can be securely and transparently tracked, making it possible to buy and sell NFTs with confidence.

What makes NFTs different from other forms of digital assets?

The biggest difference between NFTs and other forms of digital assets is the concept of "digital scarcity". Unlike other forms of digital assets, such as digital images or music files, NFTs are truly one-of-a-kind and can't be duplicated or forged. This scarcity makes NFTs unique and valuable, and is one of the key drivers behind the growth of NFTs in the world of art and collectibles.

Another difference between NFTs and other forms of digital assets is that NFTs can be securely and transparently traded on the open market. This allows artists and collectors to easily buy, sell, and trade NFTs, making it possible to create new forms of digital ownership and scarcity.


NFTs are a unique and exciting form of digital asset that are reshaping the way we think about ownership and scarcity in the digital world. Whether you're an artist, collector, investor, or just someone who's curious about NFTs, understanding the basics of how they work is an important step towards realizing their full potential.