Updated: Nov 24
Fungible and Non-Fungible.
To better understand what NFT is, we have to know the following terminologies: fungible and non-fungible.
Fungible means the item is replaceable by another identical item; mutually interchangeable. An example is a $100 USD bill is interchangeable with another $100 USD, there is nothing special about a particular USD bill.
A non-fungible object, on the other hand, is completely unique and has a distinct value. For instance, artistic paintings are not the same, each painting even if painted by the same artist is different and each painting cannot be replaced by another painting.
What is a NFT?
NFT stands for non-fungible token, it represents ownership of unique items such as a property title (document), images or individual assets, which are generally created using smart contracts that are used for cryptocurrencies. In simple terms these cryptographic assets are based on blockchain technology. The smart contract does not actually contain the item but is a reference to a hosting platform that is storing the object
What can NFTs be used for?
NFT can be used for virtually anything regarding the ownership of property, storage of documents, identification, or a digitised item. At the moment, the uses of NFT are largely confined to art and music. Whereas, other uses of NFTs, although not as popular at this time as art and music, include gaming, metaverse, fashion, identifications, and certification. A one-of-a-kind piece of digital asset with distinctive and special qualities can be created using this technology, such as a unique gold coin.