What is an NFT?
And to understand what it means, let’s quickly break down each of these words together. First of all, the Token.
An NFT is first and foremost a Token
A Token is used to represent many things, including art, video, music, and even physical objects. In practical terms, there are many things that can be turned into Tokens. These Tokens are mostly PNG images, but also animated images (GIF), MP4 audio tracks, or videos.
For a simple image to become an NFT, it must be stored on an online network called the Blockchain. A unique “serial number” is then created each time a Token is placed on the blockchain. Each NFT will have its own serial number, which makes it unique. This is also what makes each Token non-fungible.
What does it mean when we say that something is fungible?
We say that an object is fungible when it can be replaced by another identical object. Example: A $10 bill can be replaced by another $10 bill. Its value will be strictly the same. It is therefore a fungible object. On the other hand, your cell phone, your watch, your clothes and anything else you own that you could go and sell on eBay falls into the category of non-fungible objects, because each of these objects is unique and can have a completely different value. Barack Obama’s laptop will probably be worth more than someone else’s, even if it’s the same model and brand. Likewise, one NFT cannot be exchanged for another NFT. Because even if it is the same image, each copy of this image has its own serial number and therefore has its own value, thus making it unique.
A Non-Fungible Token (NFT) can therefore be simply described as a unique digital object, stored on the Blockchain.
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