Non-fungible tokens (NFTs) are like collectibles – they function as unique objects with their own history. Just like you can’t replace your Star Wars figurine with another, you can’t use one NFT to make another function.
The phenomenal rise of cryptocurrency has opened up an era for many use cases, including blockchain-based technologies. And NFTs, which are tokens that are unique & can’t be replicated, is fueling this new technology. With that innovation in mind, now there are assets like art, music, digital images that you can now own permanently. One of the most notable examples might be toilet paper – last year it sold for $94 million! Unique NFTs cannot be replaced like for like – for example, you can’t trade a Bitcoin with another piece of art. This is because they’re different and one-of-a-kind. There’s always only one!
What Is NFT?
“Non-fungible” means that it is one of a kind and cannot be replicated. A Non-Fungible Token (NFT) is an asset that represents digital real-world objects like music, art, 2D avatars or images, videos, or any other collectible items. NFTs are a new asset class, they’re backed by blockchain technology and they’re a great way to invest in a booming industry. They have been around since 2014, but they’re becoming more popular recently. Just last month, a set of 101 Bored Ape Yacht Club NFT was sold for $24.4 million (roughly ₹ 179 crores) at Sotheby’s auction house.
It’s not always clear at first what NFTs are. When you buy an asset, you’re really just buying a limited license to use it. The devil is in the details- read through our blog post for more info! Many collectors also appreciate the made “digital rights” of buying today.
While it shares some similarities with cryptocurrency, NEM is not a currency. It is a peer-to-peer network that provides services similar to domain names and servers. Cryptocurrencies are all equal in value to one another, so 1 rupee is worth 1 Bitcoin. What’s more, it doesn’t matter if prices fluctuate- they will always be worth another?
Non-fungible tokens are different. Each NFT (virtual asset) has a unique digital signature that can’t be copied or cloned.
Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.