Before grasping NFT, we must understand what does fungibility means. Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type without affecting its value. Money is one of the best example of fungible tokens. If you have a $100 bill &I have five $20 bills then we can exchange it easily without causing any benefit or loss to anyone. Just like that, Non-Fungible items are those which can not be interchanged like this.
We all know that every art is unique andcan not be replaced by any of the similar items. Paintings hanging in the museum is one of the best example of it.
Non-Fungible Token (NFT) denotes a incomparable digital asset which cannot be interchanged and is unique. It is backed by cryptography (the same technology we use to generate cryptocurrencies) and thus allows the owner to claim their creation.
It’s just a digital representation of your digital assets (image, video, text file, pdf, etc.) whose proof-of-existence & proof-of-ownership is being managed by a Blockchain ledger, simply called Blockchain. this can be only possible because the Blockchain ledger is taken into account immutable (means can’t be altered or removed) and thus can not be tampered with by anyone without paying billions of dollars & years of your time.
NFTs may be created for a good type of digital art and assets like music, painting, memes, videos, gaming collectibles and lots more. Since NFTs provide a way of belonging and help in establishing a signal of ownership, they’re being employed to secure domain names, gaming collectibles, any priceless memory, and far more.
In brief, anything which is unique, has some worth, and can be digitally minted, qualifies to be converted to NFTs.
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