Non-fungible tokens (NFTs) prove ownership by creating a unique digital certificate for a specific asset.
A decentralized digital ledger that keeps track of all non-fungible token transactions and ownership changes is used to create each NFT. Once generated, an NFT has a unique digital signature, signifying ownership of the asset it represents.
This signature is recorded on the blockchain along with all 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 change of ownership of tangible assets, this procedure is digitally recorded on the blockchain.
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Each NFT is distinct and has a distinctive digital signature, allowing ownership of a particular item to be established. For example, if a creator creates an NFT for a digital artwork they produced, the non-fungible token can be used to demonstrate that the creator of the NFT is the rightful owner of the artwork.