NFT is an abbreviation for non-fungible tokens which are digital assets stored on the blockchain. These tokens can neither be replaced nor interchanged because of the unique properties that it has. These digital assets come in the form of collectibles and digital art which are purchased using digital currency- cryptocurrency. NFTs were introduced back in 2012 by Colored Coins who describes it as used for manging the ownership of assets on a blockchain. It represents ownership of an item that can be bought or sold online on various marketplaces and platforms such as OpenSea, Binance, Nifty Gateway Rarible, Axie Marketplace and Superrare. The market for NFTs in 2021 was worth $14 billion that was the total value of the global fine art market.

DIfference Between NFTs and Cryptocurrency:

NFTs just like cryptocurrency are built on blockchain technology that ensures transparency. However, they differ from each other in terms of value. The NFTs have both economic and non-economic value which does not only depend upon its utility but also upon the uniquessness, investors interest, and upon its features however, cryptocurrency mainly depends upon the utility.

Use and Benefits of NFTS:

NFTs are being used by the public to gather own digital art work, collectibles, video games, domain names, and virtual real estates etc. The NFTs and their values differ on the basis of the credibility of each NFT, utility, and current market trend.

Benefits:

1- Decentralization and Transparency:

The decentralization and transparency feature gives the authority and decision making to each user instead of limiting it to a single user or a group. This decentralization allowed the users on a network to manage their work by themselves instead of rellying on a third party for coordination. Besides decentralizaion, transparency of transactions is also one of the benefit.

2- Ownership of Uniqe assets:

NFTs are unique and differ from each other which means that each token represents a different item. This feature allows the users to verify the ownsership of the asset and that only he/she has the official version.

3- Creator Control:

NFTs provide the creators with a feature that allows them to have control over their work and to create conditions for their piece of work such as reselling policy and using conditions.

Disadvantages:

Besides the benfits there are few disadvantages as well which are listed below:

1- Less Regulation:

Because of decentralization there is lack of regulation which can lead to farud, and scams and can impose a risk on investors.

2- Energy Consumption:

The energy consumption in upholding the digital economy is not considered as sustainable as in Switzerland the energy consumed in mining in 2020 was more than the energy consumed overall.

3- Copyright:

The copyright of the asset created is an issue that remains unaddressed and this can create a challenge for the creators when their intellectual property is being used by others without permisiion.

4- Platforms Dependency:

The platforms or marketplaces used to sell NFTs create a dependency which can be understood as if, these platforms shut down the user might face problem in selling or buying the NFTs

5- Limited Acceptance:

Due to ethical implications few industries despite of its popularity may resist in using NFTs.

6- Value Fluctuation:

The value of NFT may fluctuate depending upon the social factor.

Examples of NFTs:

Few examples of NFTs are listed below:
Lazy Lions.
Dribblie
Flyfish Club
Lucky Block NFTs
Azuki
NBA Top Shot
Mutant Ape Yacht Club