Non-fungible tokens (NFTs) prove ownership by creating a unique digital certificate for a specific asset.
A decentralized digital ledger is used that keeps track of all non-fungible token transactions and ownership changes to create each NFT. When generated, an NFT has a unique digital signature, signifying ownership of the asset it represents.
This signature is recorded in the blockchain with all the information about the asset and the transaction. Since the blockchain is decentralized and offers immutability, it provides a secure and transparent record of ownership that cannot be changed or deleted.
Once an NFT is minted, it can be transferred from one owner to another through a secure and transparent mechanism. Similar to the change of ownership of tangible assets, this procedure is recorded digitally on the blockchain.
Related: Non-fungible tokens: how to get started with NFTs
Each NFT is distinct and has a distinctive digital signature, allowing ownership of a particular item to be established. For example, if a creator makes an NFT for digital artwork that they have produced, the non-fungible token can be used to prove that the NFT creator is the rightful owner of the artwork.
