How do NFTs work?

NFTs are bought and sold with cryptocurrency through a marketplace. The majority of NFTs are stored in smart contracts on the Ethereum blockchain using the ‘ERC-721’ standard. Ethereum is a long standing cryptocurrency, second to that of Bitcoin.

The Ethereum Blockchain is a decentralised public ledger that stores and verifies details of all transactions on its network. When you buy or sell an NFT using Ethereum, the blockchain keeps track of its current owner, as well as all previous owners.

By being decentralised, NFTs on the blockchain are not stored on any one server. The record of ownership of all NFTs are stored on many servers and computers throughout the world, referred to as ‘nodes’. This makes counterfeiting practically impossible.