What is a NFT?

Description, Features, Use Cases and Types

A Non-Fungible Token (NFT) is a type of Digital Asset that represents ownership or proof of authenticity of a unique item or piece of content using Decentralised Ledger Technology (DLT). Unlike cryptocurrencies such as Bitcoin or Radix, which are fungible and can be exchanged on a one-to-one basis, NFTs are unique and indivisible.

Here are key characteristics of NFTs:

1. Uniqueness: Each NFT has a distinct and distinguishable value. This uniqueness is often achieved through the use of blockchain technology, or in our case Radix, which provides a transparent and decentralized ledger to verify ownership and authenticity.

2. Indivisibility: NFTs cannot be divided into smaller units like traditional cryptocurrencies. They exist as whole units, and when bought or sold, the entire token is transferred.

3. Ownership and Proof of Authenticity: NFTs use Radix to provide a secure and transparent ledger of ownership. This decentralized ledger serves as proof of authenticity and ownership for the digital asset represented by the NFT.

4. Interoperability: NFTs can represent various types of digital or physical assets, including digital art, music, videos, virtual real estate, virtual goods in video games, and more. The standardization of NFTs (as already done on Radix and Foton) allows for interoperability across different platforms and applications.

5. Smart Contracts: NFTs often utilize smart contracts (called Components on Radix), which are self-executing contracts with the terms of the agreement directly written into code. Smart contracts enable automated processes, such as automatically distributing royalties to the original creator whenever the NFT is resold.

NFTs have gained significant popularity in the art world, gaming industry, and entertainment sector, providing new ways for creators to monetize and share their digital works. The ownership and scarcity aspects of NFTs have created a digital collectibles market where users can buy, sell, and trade unique digital assets with a level of verifiable scarcity and provenance. With such power and flexibility comes also a lot of responsibility and risks for the users. For that please check our Terms of Service section. NFTs on FOTON take full advantage of the RADIX tech stack, and that means that they are native to the ledger. They are literally moving from wallet to wallet, not like on Ethereum where they are just a bookkeeping done at the smart contract level. This translates in better security, flawless experience for the Collector and powerful features which can't be found anywhere else for the Creator. Foton has 2 Types of NFTs (or NFT standards) that are differentiated by the way the Creator Royalties are Enforced and Collected: Royal and Rebel. You can find out more about these in the Royalties or Radix NFT Standards section.