Many of us who know about cryptocurrencies or have been in the crypto game for some time would have heard the term Non-Fungible token or (NFT). Perhaps You might have heard about this term in 2017, thanks to Crypto kitties which is a game that popularised this notion.
In this post, I will try to explain this concept simply and I hope that it will be beneficial for You all.
So let’s jump in.
In order to understand NFT. It is a good idea to understand what is fungible.
What does it mean to be fungible:
Fungible simply means that an item is interchangeable with another.
Take for instance:
I have a $30 AUD note and my friend has a $30 AUD note. If he was to borrow $30 from me and repay me later the same amount in the following orders ($2x15 = 30 or 3x$10 = 30 ).It would still be $30.
WHY?
Since the notes are tangible, they are in AUD and they possess the same value unless off course are counterfeit.
What is a NFT
In contrast, A non-fungible token is unique and is not interchangeable unlike currencies.
Take for instance:
I go to a sneaker store and just assume that instead of credit cards, cash etc they only use gift cards as part of payment options in the store.
Suppose I have a $30 gift card while the other customer next to me on the checkout has a $50 gift card. In essence, we both have a gift card but they are non fungible.
I agree they look the same, are used in the same store and even have the same purpose — which is to pay, but they both have different values.
However, I’m not able to purchase anything greater than $30 while the person next to me is able to purchase anything greater than $30 since they have a $50 gift card.
Perhaps other features like having a custom name of the recipient, an option many retailers offer greatly amplify the criteria for being non-fungible.
Another relevant example can be humans. We as humans have certain characteristics which make us who we are including DNA, gender, complexion , ethnicity, genetics. Hence h
If we look at this, we humans are NFTs and can be sold on NFTS market place (I won't appreciate it but hey that's me) and by the way this is already happening, please see one of my articles where I discuss Tradestars.
https://www.publish0x.com/freddy-revolas/have-you-ever-thought-that-you-could-monetise-your-sports-kn-xxwwgpm
The bottom line is that NFTs are unique and as seen in the previous examples they are not interchangeable as in the case of currencies like AUD and cryptocurrencies like Bitcoin.
Obviously there are many more examples of NFTs like art, collectibles antique items etc but for the sake of keeping it simple, I kept my article short
So there we have it, I hope this helps
