NFTs, or non-fungible tokens, are unique data strings that live on a blockchain.
To understand NFTs, we first have to understand where they’re generated and stored: the blockchain.
Blockchains are like giant online ledgers of data. They can be added to and read but never edited. Think of a giant stone wall in the town square where people can chisel on essential data — but never erase their neighbor’s.
The Bitcoin blockchain was generated in early 2009 and still operates today. But it can only be used to store financial data. With Ethereum, users can store all kinds of data on its blockchain. It allows the storage of non-fungibles, i.e. one-of-a-kind strings of code.
The implications of storing unique data to a secure, decentralized blockchain are endless — we can keep medical records there, legal data, and of course, ownership of art.
When you buy an NFT on OpenSea, you’re not buying a .JPG or even the copyright to use a specific piece of art. You’re just buying a string of data on the blockchain that says: “Chris owns NETFLIX 2087 by Beeple.”
In summary, NFTs are “certificates of ownership” stored on the Ethereum blockchain that certify that one particular person or group “owns” a digital piece of art.