Context: Recently, a French luxury fashion brand is suing American digital artist who created a series of NFTs (Non-Fungible Tokens), a rapidly growing part of the cryptoworld.

About Non-Fungible Token (NFT)

• NFT is a one-of-a-kind digital token that is permanently linked to a piece and is encrypted with the artist's signature. It validates the piece's ownership and authenticity.
• It's a form of digital asset that can be used to represent real-world artefacts like art, music, video, and in-game stuff.

They're frequently encoded with the same software as many other cryptos and are bought and sold online, often with cryptocurrency.

• For example, money is fungible, which means that one rupee can be exchanged for another.
• By definition, a non-fungible token is not comparable to another non-fungible token.
• This means that each NFT is either one-of-a-kind or part of a very limited run, and each has its own unique code. 

Key difference between a non-fungible token (NFT) and a cryptocurrency

• Fungible assets, such as currency notes, can be easily interchanged.
• Cryptocurrencies designed to operate as currencies, such as bitcoin, are fungible, which means that any two bitcoins are similar and thus interchangeable.

How does NFT transaction take place?

• NFT transactions are recorded on blockchains, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain.
• NFTs became popular in 2021, when they were beginning to be seen by artists as a convenient way to monetize their work.

Why are they in high demand?
One of the other attractions is that NFTs are a part of a new kind of financial system called decentralized finance (DeFi), which does away with the involvement of institutions such as banks.

• For this reason, decentralized finance is seen as a more democratic financial system because it makes access to capital easier for lay people by essentially eliminating the role of banks and other associated institutions.

Even so, because NFTs operate in a decentralized system, any person can sell a digital asset as one.

• This can sometimes create problems. For instance, if you were to sell someone else’s artwork as an NFT, you could essentially be infringing on a copyright.