Just like in the physical world, where people can collect everything from artwork to books to jewelry, you can also collect items in the digital world!
For example, in a video game, players can collect items such as armor pieces and characters that exist solely in the digital realm. Similarly, digital artwork can also be collected.
Certain digital collectibles may only exist within a specific video game or mobile application, with the ownership details being retained by a centralized entity. On the other hand, other digital collectibles can be stored in a decentralized manner across multiple servers that are not under the control of a single entity. This setup allows users to have custody of their digital collectibles without dependence on a single overarching entity.
This decentralized system is commonly known as the blockchain. Smart contracts, which reside on the blockchain, record ownership details. These records are transparent and available for anyone to view and verify. Non-Fungible Tokens, or "NFTs," are a type of smart contract that encapsulates the ownership information for digital collectibles.