June 5th, 2023
What is an NFT Non-Fungible Tokens? There’s nothing like a new terminology that leaves you thinking, “Um… why is it that there is so many different explanations or different (apparent) definitions for this?
May be, many people just don’t understand it and not really know the real meaning and can’t explain it adequately.”
Before long, all this makes you wanna cry.
Let’s start by asking what the heck is a Non-fungible Token?
The word “fungible” refers to goods contracted for, without an individual specimen being specified. In other words, goods that can be replaced by another identical item; mutually interchangeable.
For instance, fungible workers means workers who are “virtually indistinguishable from others” in terms of the value of their contributions in the workplace.
What does this really mean?
In economics, a fungible good or property is the property of a good or a commodity whose individual units are essentially interchangeable and each of whose parts is indistinguishable from another part Non-fungible goods refers, obviously, to goods that CANNOT be replaced by another identical item.
How are goods, not replaceable by another item?
A non-fungible good means that it’s unique and can’t be replaced with something else, because it is unique in its form.
For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing, but a sports trading card, a digital form of an art, a song, are non-fungible.
If you traded any of these for a different card/ePainting/song, you’d have something completely different.
A non-fungible token is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded.
NFTs are generally one of a kind, or at least one of a very limited run, and have unique identifying codes.
This stands in contrast to most digital goods/products, which are almost always infinite in supply.
Types of NFT data units may be associated with digital files real-world objects such as collectibles, art, GIFs, virtual avatars and video game skins, photos, videos and sports highlights, and audio.
From art and music to tacos and toilet paper, these digital forms of assets are selling fast, some for millions of dollars.
Still thinking, what is an NFT Non-Fungible Tokens?
But are these so-called NFTs worth the money or are they just a hype, another bubble, waiting to pop? Some experts say they will change investing forever.
NFTs are gaining popularity because they are becoming an increasingly popular way to buy and sell digital artwork. Between January 2018 and January 2022, almost $180 million has been spent on NFTs.
What can you buy or trade at an NFT supermarket?
NFTs can really be anything digital (such as digital form of drawings, music, your brain downloaded and turned into an AI software representation), but a lot of the current excitement is around using the tech to sell digital art.
And this gives owner the right to claim that they own the right through ownership of the digital code that represents the digital asset.
Anyone can view the digital art or digital files online for free. So why are people willing to spend millions on something they could easily screenshot or download?
Wells, because an NFT allows the buyer to own the original item which contains built-in authentication (blockchain), which serves as proof of ownership. Collectors value those “digital rights” almost more than the item itself.
How Is an NFT Different from Cryptocurrency?
NFT is built using the same kind of programming as cryptocurrency, like Bitcoin, but the difference is that each NFT has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible).
Bitcoin and other cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another since they have equal value.
One bitcoin is equal to another bitcoin, and one Dollar is always worth another Dollar.
Does that now make sense?
Here’s the big deal about NFTs:
Blockchain technology and NFTs allow artists and content creators (or their future owner of NFT) a unique opportunity to monetize their digital asset.
For example, artists no longer have to rely on putting on shows, events at galleries or auction houses to sell their art. Instead, the artist (and future owner of an NFT) can sell it directly to the consumer as an NFT, which also lets them keep more of the profits.
In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. This is an attractive feature as artists generally do not receive future proceeds after their art is first sold.
This is a transformation in the marketplace of digital goods controlled by asset ownership validation through the blockchain technology.
Yes, THIS IS a big deal.
Still asking, what is an NFT Non-Fungible Tokens? Let us know and we’ll write more about it.--- article sharing ---