Non-fungible tokens are, in a way, a lot like cryptocurrency. The record of their existence lives on blockchains, they can be bought and sold using cryptocurrency, and there isn’t necessarily a physical asset that ties them to the real world.
NFTs differ from cryptocurrency in that they’re non-fungible, meaning they can’t be exchanged for an identical item. Cash, for example, is a fungible asset: Each dollar may be unique, but the particular dollar you have doesn’t matter. If you swap a $10 bill for two five-dollar ones, you still have $10. Trade your $10 for an autographed baseball card, however, and you then have a non-fungible item: it’s unique, and while it may have a monetary value, it isn’t itself a trade commodity.
Other examples of non-fungible goods include artwork, houses, website domain names, your pet cat and parcels of land.
Learn more about NFTs in this free PDF download from TechRepublic.
In the download:
- What are NFTs?
- What rights does ownership of an NFT confer?
- How are NFTs created, and how are NFTs sold?
- How could NFTs impact businesses?
- Is the NFT market already in a bubble?
- And more!