In this article, we'll break down what we believe an NFT is.
Non-Fungible Tokens (NFTs) are unique digital items with blockchain-managed ownership. There are many kinds and applications of NFTs - but before we dive into the details, let's learn about a key term: fungibility.
What is fungibility?
If something is fungible, it is easily exchanged with something of equal value. Don't get overwhelmed by the idea of fungibility; it's just the ability of a good or item to be interchanged with other individual goods or items of the same type.
A simple comparison of fungible, semi-fungible, and non-fungible items is pictured below
Fungible items like a dollar bill, gold - even cryptocurrencies like Bitcoin and Ethereum - can be substituted with one another without losing value. They are fungible.
Non-fungibility and NFTs
If something is non-fungible, it means that it cannot be replaced. It represents something unique in value - and that's what an NFT is!
The token part of Non-Fungible Token refers to a digital certificate stored on a publicly verifiable distributed database, also known as a blockchain.
The information on this digital certificate, also known as a smart contract, makes each NFT unique. No two NFTs can be swapped, and this makes them non-fungible. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical items, and more!
Now that you've learned what an NFT is check out some other key terms in NFTs and Web3!
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