What are NFT’s

The following is from an email from Kraken exchange.

Non-fungible Tokens are perhaps the most exciting innovation in crypto this year. For a deeper understanding of where the momentum is coming from, Kraken Intelligence has compiled a comprehensive report explaining what they are, how they work and why they are valuable.

In “Non-Fungible Tokens (NFTs): Redefining Digital Scarcity” our team outlines why NFTs are more than just JPEGs or GIFs, how they empower online communities and why they are a technological breakthrough for content creators looking to build an economy with direct access to their consumers.

While art and music appear to be the initial use cases for NFTs, they represent so much more. Many are sold as part of a limited collection, which buyers then use as a form of digital identity and affiliation with a community. Those NFTs can serve as a fundraising mechanism for the community who issued them, and in turn reward members who bring the greatest value or reinvest the funds in future activities.

Not only that, because an NFT is digitally scarce and verifiably authenticated on a blockchain, it can act as a passkey for exclusive content or an activity at the creator’s discretion. In addition, when the NFT is created via a smart contract, should the asset be continuously sold in the future, a portion of the proceeds can be returned to the creator in the form of a royalty.

In this report, you’ll also learn:

To learn more about this emerging asset class and how it has invigorated the creator economy, check out “Non-Fungible Tokens (NFTs): Redefining Digital Scarcity.”

The report