An NFT stands for “Non-Fungible Token”. Even though one Ethereum (ETH) you own is no different from one ETH that someone else owns, NFTs are non-fungible. This means each NFT is unique and there are no duplicates out there.
An NFT exists on the blockchain — a public ledger — tracking every instance of information including timestamps, transaction hash, buyer and seller addresses, project contract address, cost of transactions, gas fees, etc. It is the first time in our lives that all transactions are transparent for anyone in the world with internet access. By creating or purchasing the digital asset and recording it on the blockchain, the NFT is now considered “minted”. You own that piece of digital art and all the exclusive rights that come with it. (Note: some artists can retain the copyright and reproduction rights, similar to purchasing any physical artwork.)
A smart contract is a key technology that makes all transactions possible without the need for a third party! It was first created by Ethereum, which has the second-biggest market cap in the crypto ecosystem. If you are not familiar with smart contracts, think of it like using a vending machine: there is no third party or middleman involved to facilitate the transaction. Everything is carried out when conditions are met by both transacting parties. The transaction is recorded on the blockchain and there is no way to reverse it.