NFT stands for Non Fungible Tokens. This is a different way of creating value respecting the classic cryptocurrencies such as bitcoin, etherium or litecoin which are called "Fungibles", because they are divisible and interchangeable. In contrast, we are dealing with crypto digital assets that are NOT divisible and interchangeable because they are unique and unrepeatable.
In recent years, these "unique" digital assets have been created with the particularity of possessing unique information recorded in Smart Contracts and are linked to equally unique assets or products such as collectibles, art pieces, patents, software licenses, sports tickets, intellectual property, copyrights or royalties, etc. This makes these tokens special and non-fungible and they need different Smart Contracts than those based on utility or security tokens, i.e. based on ERC-721 or ERC-1155 instead of the typical ERC-20 corresponding to fungible tokens (Etherium´s Smart Contracts).
The creation of these smart contracts for NFT started with the Etherium Blockchain using the mentioned above ERC-721 or ERC-1155 protocol but nowadays blockchains like TRON, EOS or NEO can create NFT standards.
An example of this type of NFT tokens based on ERC-721 is the case of LAND, in which each LAND has an unique virtual plot in a virtual world, which can be bought and sold as though it is a physical object. This type of tokens cannot be sold in a typical exchange, but in "Digital Bazaars", special markets or in those interfaces/platforms created for that purpose in the NFT Blockchain in particular.
The usefulness of this type of assets is that it makes traceable and transparent the information about the represented asset that can correspond to a total or partial ownership of it, it is like a title deed with full information of what it represents. Within the NFT smart contract the identity of the owner is registered in an immutable and incorruptible way, a description of those possession and the percentage of ownership that each user has if it belongs to more than one, etc.
NFT/ Non-Fungible Tokens are NON-divisible, NON-exchangeable tokens that are digital representations of unique assets and contain incorruptible information and full or partial ownership of those assets, with traceability and authenticity verification.
The assets represented in the NFT can be art pieces, football tickets, avatars or video game accessories, patents, intellectual property, etc., any tangible or intangible asset that can be sold in the physical world.
The particularity of being NON-FUNGIBLE, makes these tokens collectable because they can't be obtained as easily as buying BTC, ETH or LTC, and that's why you can make them increase their value.
Its origin came mainly from a game created in the Etherium blockchain called "Cryptokitties" in which you could breed "virtually" cats (something similar to the "tamagotchi" devices in the 90s marketed by Bandai) so that each one became different from the others and therefore unrepeatable and unique, making it impossible to be exchanged for any other.
The same happens with the avatars, characters or specimens in video games that became very complex with certain powers, abilities or special qualities and that are saleable and marketable in a very specific market.
NFT specific markets
For the marketing of these tokens it is necessary to create special markets since conventional crypto exchange cannot be used. An example is Crypto Art as a community of users interested in offering and demanding art through these NFT tokens in a very efficient way, so it is been surprising how this crypto community is selling their tokens and goods this way.
There are interfaces and platforms to create marketplaces designed to sell their own NFT, an example is "Opensea" in which you can create customizable markets for the NFT projects where users can also set up statistics, analytical reports and also generate income from the trade that can be promoted through this system.
The combination of decentralized applications in ETH "Dapps" and NFT is proving to be a very interesting submarket derived from mainstream crypto industry with unique and very original developments and useful in cases described above.
In short, more and more NFT projects are being added to the Crypto world as digital representations of anything that is conceived as unique. The case of diamonds is one good example that are not only considered eternal but the way they are cutting makes them unique and not comparable to any other.
In the light of what is shown above, “anything can be tokenized”.