[Editor’s Note: This is an article by Devin Partida, the Editor-in-Chief of ReHack.com. Devin is a Fintech and crypto writer whose work has been featured on industry publications such as FinTech News, Due, the Swissborg blog and FinTech Insight.]
Non-fungible tokens (NFTs) are units of data associated with unique digital files, most commonly cryptographic assets on a blockchain. These files can be anything, but they’re often pieces of art, music or recordings of live performances.
These NFTs are traded on what are effectively online digital art markets, with records of ownership, bidding, and transfers stored on the blockchain. Blockchain is the digital ledger technology that supports cryptocurrencies, smart contracts, and other cutting-edge applications.
What has made these NFTs notable recently is the high values that some early tokens have sold for. In March, a digital trading card of Tom Brady sold for more than $1.3 million in Ethereum. Famous auction house Christie’s sold an NFT of a digital painting for more than $69.3 million.
Unlike tokens and coins, which are fungible, NFTs can’t be exchanged for one another. They all have their own values and code that makes them unique from each other and identifiable.
These NFTs have already had a major impact on the crypto space. Soon, they’re likely to have an impact on fintech (financial technology), both inside and outside crypto. But the transformative potential of the tech may be overshadowed by concerns about the security of crypto assets, and the impact that NFTs may have on the environment.