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What is a Non Fungible Token? NFT Definition

Non Fungible Token

A Non-Fungible Token [NFT] explains the internet's latest craze. 

What Exactly is Non-Fungible Token? NFT Definition

A NFTs are digital assets that are usually on an Ethereum blockchain, that has unique identification codes and metadata that distinguish them from each other.

Now, lemme elaborate it in a simple and easy to digest sentences.

Fungible means something you can exchange with one another and still have or give the same value. For example, I can give you N1,000 note and collect five N200 note from you. It's still fungible because the end products still yield the thing. So what does "Non-Fungible" actually means?

Non-Fungible is the opposite of Fungible, which simply means something that cannot be replaced with another thing no matter what. So all these stories simply describes NFT.

Non-Fungible Token, NFT in simple term - is a digital asset that cannot be replaced, and they are validated and stored using blockchains technology.

What you need to know about Non-Fungible Token, NFT.

  • NFTs are unique digital assets that usually exits on blockchains technology.
  • NFTs cannot be replicated or replaced. Instead, it's used to represent individual identity, Art work, Music, Properties, real-estate and lots more.
  • The word "Tokenized" simply means the real-world tangible asset, it allow them to be bought, sold and traded seamlessly.

Who Invented the Non-Fungible Token, NFT?

Kelven McCoy was the first man to invented the NFT. On May 3rd, 2014 - he created "Quantum," a Non-Fungible Token.

Quantum is a pixelated image of an octagon filled with shapes that share the same Central, with larger shapes surrounding smaller ones and hypnotically pulsing in brilliant hues. The one-of-a-kind "Quantum" art project (2014-2021) is currently for sale for $7 million. 

Additionally, the Twitter CEO, Jack Dorsey sold his first-ever tweet for $2.9 millions as an NFTs.

Why would I want to Invest in NFTs?

Investing in NFTs might bring numerous advantages and opportunities to humans kinds. For instance, it's regard to as potential investment opportunity and comparable to cryptocurrencies because their value may rise.

So therefore - NFTs are considered collector's object and their emotional value maybe factors for some.

How does NFTs Work?

NFT works as part of the Ethereum blockchains. Ethereum is a cryptocurrency like Bitcoin and Litcoin but its blockchains technology also support Non-Fungible Tokens.

This Ethereum blockchains technology helps store extra information that makes them works differently and assign owners identification.

However, with NFTs, special codes and meta data are added to a particular digital piece of work that makes it unique or to create a digital certificate of ownership. This is what you buy and sell as NFTs.

Additionally, the digital certificate of ownership ensures easy tracking and verification.

How to Trade NFTs

To Trade NFTs, you need will need to have or purchase some cryptocurrency. NFTs are traded of blockchains that uses cryptocurrency as means of exchange. 

All you need to do is to find out what cryptocurrency platform your NFTs provider accept. You can buy coin from those platforms or buy from any of your choice (eg Coinbase, eToro, Coinmama) and transfer to the NFTs wallet.

Once you are done creating your NFTs crypto wallet, you can head over to NFTs market to start trading NFTs. Here's a list of some popular NFT marketplace.

  • OpenSea.io
  • Foundation
  • Rarible
  • AirNFTs
  • Nifty Giveaway
  • NBA Top Shop (for basketball video highlight)
  • Mintable
  • Valuable (for auctioning tweet, such as Dersey's)

How to Buy NFTs

Are you a newbie willing to buy NFTs for your favorite meme? Here's how to go about it.

Most importantly, any digital stuff can be bought as NFT. But there are few things to look into when buying one. 

First and foremost, consider what marketplace you wanna buy from, what type of digital wallet is required to store the asset, and what type cryptocurrency wallet is also required to complete the buying.

OpenSea, Rerible and some other popular NFTs market are mentioned earlier as place where you can start your NFT journey. Visit those market place to discover what and what are their recommendation when it come to digital wallet to store NFTs and Cryptocurrency to complete the buying.

How to Sell NFTs

To sell NFTs is as easy as to buy it. All you need is go to the same market place where you bought your NFTs and place an advert you wanna sell you NFTs.

Meanwhile, the process of selling NFTs are varies from platform to platforms. All need to do is upload your contents to a marketplace and follow their instructions to turn it to an NFTs.

How to Create NFT

You can create NFT, I can create NFT, Everyone can create NFT. All that's needed is a digital wallet, a small purchase of Ethereum and a connection to NFTs marketplace.

At the marketplace, you will be able to upload your content and turn it to NFTs.

Now, here's the concluding part.

The Difference Between NFTs and Cryptocurrency

Like physical money, cryptocurrencies are fungible i.e., they can be traded or exchanged, one for another. For example, one Bitcoin is always equal in value to another Bitcoin. Similarly, a single unit of Ether is always equal to another unit. This fungibility characteristic makes cryptocurrencies suitable for use as a secure medium of transaction in the digital economy.

NFTs shift the crypto paradigm by making each token unique and irreplaceable, thereby making it impossible for one non-fungible token to be equal to another. They are digital representations of assets and have been likened to digital passports because each token contains a unique, non-transferable identity to distinguish it from other tokens. They are also extensible, meaning you can combine one NFT with another to “breed” a third, unique NFT.  

Just like Bitcoin, NFTs also contain ownership details for easy identification and transfer between token holders. Owners can also add metadata or attributes pertaining to the asset in NFTs. For example, tokens representing coffee beans can be classified as fair trade. Or, artists can sign their digital artwork with their own signature in the metadata.  

There are many reasons people will love to buy NFTs. It could serve as way of investment to some, while it may be a cryptocurrency replacement to some people. However, the reason might also range from personal to prospect of re-selling the NFTs at a relatively higher rate.

Feel free to share this article anywhere in the world. Best regards.

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About the Author

Hello! My name is Stephen. I'm a content writer. I write stories about Finance, Businesess and Technology. Contact me via the contact page. Thanks.

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