Digital NFT AssetsWhat is an NFT?
Non-fungible tokens - or NFTs for short – are an increasingly popular asset class. If something is fungible, it is mutually exchangeable. To be clearer, it can be exchanged like-for-like with an identical item. US Dollars and Euros are two examples of fungible assets. Bitcoin is also a fungible asset because each bitcoin is interchangeable with another. They are identical in every way. Therefore, if something is non-fungible, it is the opposite. Non-fungible goods are truly unique. A good example of this would be a limited-edition baseball card. There is nothing it can be interchanged with on a like-for-like basis. It has its own distinctive properties, including how it has been preserved, the year it was produced, and its value generally. Non-fungible tokens are unique digital assets. They simply use the blockchain to issue and track immutable digital goods.
What are the benefits of NFTs?
- NFTs are already transforming our concept of what ownership really means . The features of blockchain technology mean that each NFT token cannot be duplicated, reproduced, or exchanged, and their ownership is immutably recorded.
- NFTs are instantly transferrable. There are an increasing number of secondary markets where NFTs can be bought and sold quickly and easily.
- Since NFTs are based on blockchain technology, they cannot be counterfeited. This promises to overcome a long-standing problem that has plagued the art ticketing, and collectible industries. When you buy expensive physical goods, they often come with a certificate of authenticity. An NFT inherently comes with such a certificate. This gives buyers the confidence that they are getting exactly what they pay for.