In order to be able to explain what Non-Fungible Tokens are, we need to break down the words that compose it:
Fungible: this word represents a property, and gives something interchangeability. An example would be a 1-Dollar-bill, since you can exchange each 1-Dollar-bill with another 1-Dollar-bill without changing the value.
Token: cryptocurrency tokens are cryptocurrency assets, that represent something other than a monetary value. An example would be loyalty points, ownership of something else…Think of it as a stock, but instead of having ownership in a company, it can be ownership in anything else.
NFTs are basically digital ownerships tokens, that run on blockchains that support smart-contracts, such as Ethereum. Their non-fungibility is similar to real-world contracts, where you can’t trade one contract to another, because the “actual content” differs from each other.
In today’s fast-moving cryptocurrency sphere, many concepts and applications are constantly evolving. Digital assets and their classifications are evolving right alongside cryptographic and blockchain technology.
For Non-Fungible Tokens, real-world applications of smart-contracts lie ahead. With cryptocurrencies such as Bitcoin being used to transfer monetary value, NFTs are used to transfer digital ownership. That’s why you can’t divide NFTs the same way you would do with Bitcoins, like for example sending 0.5 Bitcoins, as sending half a contract or half an entrance ticket wouldn’t make much sense.
NFTs can theoretically map any physical or virtual object. For example, there are collectibles (trading cards), virtual real estate, but also digital art. On this page you can find the most important projects.