You need to know that Non Fungible Token (NFT) is a digital asset or a token that uniquely represents ownership of goods (assets) and is built by Blockchain technology. This NFT cannot be exchanged for other tokens or assets one by one like other digital assets. Because NFTs are created using self-executing smart contracts with terms between buyers and sellers recorded directly into lines of code.

How does Non Fungible Token (NFT) Work?

For how it works when a Non Fungible Token (NFT) is created, a unique digital signature is created to represent the asset. This digital signature is then stored on the Blockchain and the NFT is released to its owner. The price of NFTs is determined by supply and demand, and the price of NFTs varies depending on the value of the good represented by the NFT.

You should also know that Non Fungible Tokens (NFTs) are owned and controlled by the person who holds the private key to the digital wallet that stores the NFT. This is what makes the owner of the NFT have the ability to transfer ownership or sell the NFT to others.

In addition, NFTs are usually accompanied by metadata, which is additional information about the NFT stored on the Blockchain. This metadata allows details about the item represented by the NFT and information about its creation and ownership history.