NFTs - or non-fungible tokens - are all the internet rage. But what actually are they?
An NFT, or a non-fungible token, is a digital asset that can be traded online just like Bitcoin or other cryptocurrencies.
They’re used by people as a way to represent ownership of a unique asset - kinda like the trust deed to an item, but in the digital world.
But here’s the catch: an NFT is completely unique (hence the non-fungible part), and can’t be replaced. In other words, there’s no equivalent asset to an NFT.
You can think of it like a one-of-a-kind Baggy Green signed by Sir Donald Bradman, but in internet form.
Actual NFTs include:
If one Bitcoin is worth $65,000, you can exchange that Bitcoin for the money. That’s because Bitcoin is defined by its value, rather than its unique properties.
But there’s no monetary equivalent asset to Jack Dorsey’s first-ever tweet, because it has unique properties. Kind of like art. Hard to value.
Without getting into the nitty gritty, NFTs are part of the Ethereum blockchain.
Ethereum is a cryptocurrency, but its blockchain (aka the building blocks behind it) support NFTs.
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