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What is a NFT?
A NFT is a non-fungible token used as a unit of data stored on a blockchain that certifies the uniqueness of a digital resource.
Smart contracts are programs that reside on the blockchain and are executed deterministically by all nodes, from the same inputs they produce the same results. In the case of NFTs the code executed by these pieces of software is actually immutable and certified so it excludes the risk of counterfeit.
The NFT is embedded within the blockchain, the decentralized digital ledger that records every single transaction ensuring transparency and traceability onto the chain.
The largest NFT collections have millions, and in some cases billions, of trade volume.
With the proliferation of NFT technology, many digital artists have begun launching their collections into the major existing marketplaces, not always providing an artistic countervalue to the speculative potential. In doing so, a saturation of digital art content has occurred. Investors’ attention shifted away from algorithmic JPEG collections to “utility-NFT”, being part of social or gaming ecosystems and, thus, linked to the success of the ecosystem to which they belong.
Example of an algorithmic collection
NFT utility example: DeRace is a virtual horse racing platform in which the competing horse are NFTs.