An NFT is a non-fungible token. Fungible is an economic term describing an asset that is comprised of units that can be easily interchanged. Money is one such example because you can interchange one $20 bill for two $10 ones, and it will have the same value as it had before. However, when something is non-fungible, it can never be interchanged because there isn’t anything equivalent to it in terms of value. What are NFTs? A non-fungible asset has properties that are so unique that they belong only to it, and physical examples would include an original painting or a genuine diamond. NFTs are the digital version of a non-fungible asset because they can be brought and sold like any other physical possession, but they don’t actually have any tangible form of their own.
The winning bidder of the artwork will not be receiving a sculpture, painting or even a print, however, and instead, they will be given an NFT. The concept of an NFT is one that many of us are only just beginning to hear of, and it can be a difficult one to grasp. In the realm of blockchains and digital assets, changes unfold rapidly and unexpectedly, and innovations continue to emerge at an accelerated pace. NFTs, or non-fungible tokens, are a particularly intriguing development in the world of crypto. In March 2021, the founder of Twitter put an autographed tweet up for sale as an NFT. A few days later, a digital-only artwork was sold at the Christie’s auction house for an astonishing $69 million.
If you’ve wanted to learn about this latest trend in the crypto-economy, then you’ve come to the right place. We’ve written this brief and simple guide covering everything you want to know about NFTs – their history, purpose, and why they’re a source of much excitement and anticipation.
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Technically an NFT can be any digital asset, whether it is a digital drawing, a domain name, a gif, a collectible or even a ticket that gives you access to a particular event or coupon. However, most of the current excitement surrounding NFTs is centered on the sale and purchase of digital artworks. Related: The NFT Gold Rush: Here’s Why Everyone Is Talking About Non-Fungible Tokens A non-fungible token is a unit of data stored on a digital ledger or a blockchain. The majority of NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, but its blockchains have the facilities required to also support these NFTs alongside the additional data which distinguishes them from an actual Ethereium coin in terms of attributes and function. Although NFTs are associated with Ethereum, other blockchains can also build their own versions of NFTs, and some actually already have – TRON being one such example.
How does an NFT work? Related: What Is an NFT? Inside the Next Billion-Dollar Crypto Sensation
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