Alright, let’s break the NFT down so that it makes sense.
Starting with the term fungible, this describes an item that is not unique. A pair of shoes that we buy at the store, a shirt, a jacket, a US Dollar, a bitcoin.
For example, we can swap our 1-dollar note for another without any benefit or loss. Each note will still have the same value. The same goes for a bitcoin.
Obviously, a pair of shoes or a shirt from your favorite department store is not unique either. There are many other identical items in the store.
On the other hand, non-fungible means unique. There is no other like it, it cannot be replaced with something else, and it is not divisible.
It’s one of a kind.
So, a house, a painting, or a song are not divisible. A painting on canvas by a famous artist cannot be interchanged with another painting.
Of course, NFTs are just as tangible collectables, but only digital.
They are art in JPEG and GIF format, or music in mpeg4, video games, sports videos, articles, and even tweets.
In a nutshell, an NFT is anything unique that may be stored or represented, if you prefer, in a digital format.
The keywords here are “unique” and “digital format”.
In the next article, we will explain the term token, so keep reading!
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