What is an NFT?

What is an NFT?

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Blockchain Made Easy: What is an NFT? 

 

Here at Blockchainr, we’re all about making blockchain and crypto accessible, because we believe it’s the future! 

 

In this series of posts, we’ll be posting regularly about the kinds of topics we see confusing people out there - and we’ll make it easy to understand.

 

First up, we’re going way back to the basics! 

 

What is an NFT? 

 

An NFT is a non-fungible token.

 

What does that mean? 

 

Something that is non-fungible means that it’s unique - meaning something else can’t come and replace it.

 

What does a real-world example of this look like? 

 

In the real world, something that is not fungible could be your house, for example. You can’t go and easily replace your house, it is unique from the foundations all the way to the decoration. You cannot lend someone your house, and have them return you a different house. Therefore, a house, or an owned car, is not fungible.

 

An example of something fungible is money. You can easily change a 1$ bill for another, and the value is the exact same, regardless of whether or not the actual note itself is the same. You can also easily convert that 1$ into quarters and dimes, and the value of it would be the same regardless of how it’s given to someone. 

 

So, going back to NFTs, what does it all mean? 

 

An NFT is a non-fungible token, which means that it is unique and cannot be exchanged for something else. 

 

It is a digital asset, usually linked to art work or some other form of collectible, either physical or digital. 

 

They cannot be replicated, meaning that they are unique. 

 

They can be used to represent individuals identities, property rights, supply chain, medical fields and more, but you’ve probably heard of them because of the massive hype that happened a few months ago, with NFTs from various collections soaring in value at a very fast rate. 

 

They evolved from the ERC-721 token standard, so if you see “ERC-721” - you can assume someone is talking about the token of an NFT. They can also be found under the ERC-1155 standard, which is similar to ERC-721 but has reduced transaction and storage costs, and allows the possibility to batch multiple types of non-fungible tokens in one contract.

 

So now when you hear someone talking about NFTs, you know what they’re talking about!

 

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