What is a Non-Fungible Token (NFT)?

(MoneyHippo.com) – NFTs have become a huge trend. Since their introduction, famous names such as Tom Brady, Snoop Dogg, Paris Hilton, and many more have touted their new line of digital art, memorabilia, and other collectibles. Still, what exactly is an NFT?

NFT stands for “non-fungible token.” “Fungible” means “interchangeable.” The token is, therefore, one of a kind. A quarter, for example, is a fungible asset. If you exchange your quarter for someone else’s quarter, you still have 25 cents and a token representing that value. Cryptocurrency works the same way. People can trade one bitcoin for another.

“Non-fungible” means the token is unique. It’s impossible to trade one NFT for another exactly like it because there are no others identical to it. Tom Brady, for example, may release an autographed image of himself winning a Super Bowl championship. That image belongs to Tom Brady, and he can sell it as a collector’s item in the form of an NFT. In this way, artists, musicians, sports legends, and many others can create everlasting pieces of themselves for their fans to buy, sell, and trade while also securing their intellectual property on a blockchain.

There’s a lot more to the fascinating new world of NFTs than this elementary description of a non-fungible token and much more to explore. NFTs also provide a palette for creativity. For instance, take the popular game “Crypto Kitties.” Each kitty is unique and stored on a non-fungible token. The game’s software facilitates the combination of one unique kitty with another, creating a unique kitty offspring on its very own NFT. 

NFTs can also be a digital representation of a real-world asset. Collectors and entrepreneurs and store a bill of sale, letter of authenticity or providence, legal documents, and all sorts of other things on a blockchain for safekeeping. As NFTs grow in popularity, massive marketplaces are blossoming across the internet, and innovative ways of experiencing, owning, and transferring art, goods, and intellectual properties are developing.

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