What is an NFT? [27,JL]

About Non-Fungible Tokens

What is an NFT?

An NFT (Non-Fungible Token) is a representation of a digital asset that is unique and can be traded

NFTs prove the authenticity as well as the ownership of assets and goods because the data containing these forms of identification are stored immutably on the blockchain.

Fungible vs. Non-Fungible

Fungible

If an item is fungible, then it can be substituted or exchanged for any similar item. Fiat currencies, like the US dollar, contain fungible units. A one-dollar bill can be exchanged for any other dollar bill. Cryptocurrency tokens like Bitcoin, Ethereum, and MANA are all fungible because one token can be exchanged for any other token of the same currency. The only thing that changes is a record on the blockchain registering the transaction.

Many Fungible Tokens are minted to an Ethereum Standard called ERC20.

Non-Fungible

A non-fungible asset, therefore, has the opposite characteristics to this definition: they are unique, irreplaceable, and non-interchangeable. One physical example of a non-fungible asset could be a plane ticket. While they look the same as other tickets, each one has different passenger names, destinations, departure times, and seat numbers.
Many Non-Fungible Tokens are minted to an Ethereum Standard called ERC721 and ERC1155.

How are they being used?

NFTs are being used to secure digital ownership of digital and real-world assets, protect intellectual property, and increase the monetization opportunities of assets for creators.

NFTs may be the new internet - the place we go to find content we like, properly registered to the original owners.

 

[27, JL]