Introduction to Fungible and Non-Fungible
Before we discuss NFT i.e. non-fungible token, it is important to understand the meaning of ‘fungibility’. A fungible item is anything that is interchangeable with another unit of the same item i.e. one unit of ‘x’ is interchangeable with any one unit of ‘x’. For instance, one dollar is equivalent to another dollar or one Bitcoin is equivalent to another Bitcoin.
A non-fungible item has unique properties and such items do not have interchangeable nature. Non-fungible items are non-replaceable, non-interchangeable and non divisible items. For instance, the painting of “Mona Lisa” by Leonardo da Vinci is the only one in the world. Trade name of Twitter, Facebook etc. is unique and rare. If you search ‘CryptoPunk” you will see a list of avatars which are all unique.
Cryptocurrencies are fungible items whereas digital arts, original arts, collectible items etc. are non-fungible items.
What is Non-Fungible Token (NFT) ?
Non-Fungible Token (NFT) can be defined in various ways. NFT is a way to record, verify, and track the ownership of a unique asset either physical or digital. In simpler words, an NFT is a unique digital certificate of ownership assigned to any underlying asset.
NFTs combine the best traits of decentralized blockchain technology with non-fungible assets. NFTs can really be anything, tangible and intangible. NFT can be any unique digital art, physical artwork, collectible items, domain or brand name etc. Now, any assets standardized as an NFT and traded as NFT shows an exclusive ownership of that digital assets. An NFT will have only one owner at one time, when you trade an NFT you own all the exclusive right to that assets.
Some of the NFTs that has take the work by storm are:
- Lebron James Dunk owned by Jesse worth $ 208,000
- Beeple-Everydays: The First 5000 Days worth $ 69.3 million
- CryptPunk 5822 worth $23.7 million