Before you can define ‘non-fungible’, you must have an understanding of what ‘fungible’ means on its own.
Collins’ dictionary defines ‘fungible’ as:
“being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind”
There are two parts to keep in mind here:
On the other hand, exchanging one thing for another will not always ensure the same exchange value. One euro coming from the Vatican won’t have the same value as one euro coming from France. A Bitcoin freshly mined from a new block won’t have the same history as a Bitcoin that has been used on a Darkweb marketplace. The fungibility of an asset is therefore defined according to its uses.
Non-Fungible Tokens (NFTs) are cryptographic assets on the Blockchain that are distinguished from each other with unique identification codes and metadata.
In 2021, Collins added the word to his dictionary, here’s their definition:
A unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible
A non-fungible token is NOT fungible. It is a token that represents a unique asset with characteristics that are particular to it: it cannot be interchanged or replaced by another equivalent token.
NFTs can take the form of digital work, a virtual land, a domain name, or even equipment in a video game.
NFTs are simply a technological medium that allows any digital item to be stored and circulated virtually on a blockchain. To some extent, NFTs can be compared with computer files in the sense that their type and usage can be extremely varied.
Have you seen Pokemon cards? There are many basic Pokemon cards as well as rare cards. A rare card is much more valuable than a basic card and owning one used to be a big deal and came with a heavy price tag. It could also be stolen!
In this tech age, everything has gone digital. If there was a special digital card, it could be easily duplicated by copying and pasting. So how can the uniqueness and authenticity of a special digital card be preserved? Non-fungible tokens are the answer.
Any digital property can be the ‘special digital card’ that’s transformed into a non-fungible token. As a result, it will be possible to identify the original card as unique due to being recorded on the blockchain. Now, it is possible to have special cards and art pieces thanks to the non-fungible tokens and blockchain.
Here are the unique qualities of non-fungible tokens that differentiate them from other tokens:
Let’s take a closer look at how NFTs can be used. In NFT Applications, we will review these different NFT segments in more detail.
On our website, you can Explore the Market Tracker to view the activity for each one of these segments!
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