The market for non-fungible tokens has recently experienced booming interest and rapid growth.
Briefly, a non-fungible token (NFT) is a unit of data stored on a distributed digital ledger called blockchain and represents a unique item. NFTs are therefore non-interchangeable. In contrast, digital and fiat currencies are fungible and are readily interchangeable.
Art, music, video, audio, trading cards, etc can be “tokenized”. The token acts as a digital certificate of ownership and be traded and sold.
The largest NFT markets and platforms are currently operating on the Ethereum blockchain. Computer nodes supporting the Ethereum network use a proof-of-work consensus mechanism to guarantee the validity of transactions on the blockchain. This entails solving complex mathematical puzzles (“mining”). Miners compete against one another to solve these puzzles and are incentivized to ever increase their extensive computing power, usually in the form of power-hungry GPU farms.
Validators on the Tezos network use a proof-of-stake consensus mechanism to verify transactions. Instead of competing to solve mathematical problems, validators are assigned rights commensurate with the number of digital coins/currency they own. Therefore, processing requirements and energy consumption are orders of magnitude lower compared to PoW blockchains such as Ethereum and Bitcoin. Small form factor computers such as Intel NUCs are popular (30W at max load, 10W idle, actual use 10-15W range). Even Raspberry Pi’s are sufficient. Additionally, the transaction fee to create, or mint, a token is 100 times smaller than Ethereum’s.