How does the NFT market work?

The NFT (Non-Fungible Token) market operates on blockchain technology, typically utilizing platforms like Ethereum. In this market, digital assets, such as artwork, music, videos, collectibles, and even virtual real estate, are tokenized into unique digital tokens. Unlike cryptocurrencies that are interchangeable, NFTs have distinct characteristics and cannot be replaced by another token. This uniqueness provides scarcity and ownership to creators and buyers. NFTs are bought, sold, and traded on various platforms and marketplaces, with transactions recorded transparently on the blockchain. Smart contracts enable creators to earn royalties on subsequent sales of their NFTs, and digital wallets store and manage these tokens securely. The NFT market has gained immense popularity recently, with high-profile sales grabbing headlines and artists embracing this new avenue for monetizing digital creations.

This mind map was published on 15 August 2023 and has been viewed 76 times.