NFT (Non-Fungible Token) | What Is The Use Of an NFT?

NFT, Non-Fungible Token in English, is the new form of cryptocurrency. The phrase literally translates to “non-fungible token”. A veritable revolution that makes it possible to testify to the authenticity of a work, for example, which is at the heart of all discussions! What is this digital currency for? What is its issue?

NFT (Non-Fungible Token) | What Is The Use Of an NFT?
NFT (Non-Fungible Token) | What Is The Use Of an NFT

What does NFT mean?

NFT is the abbreviation of the English term "Non Fungible Token". A token, or "token", is a digital asset issued by a blockchain. In the same category, we also find bitcoins.

The adjective “fungible” is an economic term. It refers to a good or asset that can be exchanged for another good or asset, of the same value. 

Conversely, a “non-fungible” item cannot be exchanged for something of equal value. In this sense, a parcel of land is non-fungible. Indeed, each field has its own characteristics. Thus, finding another plot with a totally identical value is difficult, if not impossible. Art is another example of a non-fungible asset, since its value is subjective. Then come the NFTs.

An NFT guarantees exclusive ownership of a digital asset such as a work of art, a purchase in a video game. It is possible to buy an NFT at a certain price. The fact that it is non-fungible allows its market value to fluctuate.

What is the use of an NFT?

A Non-Fungible Token makes a digital file unique. And for good reason, buying an NFT is like buying exclusive ownership of the original work included in it. However, the artist retains his copyright and reproduction rights. The acquisition of the NFT gives the buyer the right to publish the work online. An NFT can be associated with:

  • A digital painting;
  • A collector's item such as a card, for example;
  • A photograph;
  • A video game element (avatars, skins);
  • A ticket for an event;
  • A video;
  • A patent;
  • Or even a film or audio file, or even an entire musical album…

NFT is a win-win concept:

  • The artist can sell a digital file as if he were selling a physical work;
  • And the buyer can support an artist, collect digital works of art and speculate on these works.

How do Non-Fungible Tokens work?

Non-Fungible Token transactions are mostly done in crypto-currency (bitcoin, Ethereum…), however they are not crypto-currencies themselves. In comparison to dollars and other monetary currencies, cryptocurrencies are fungible. 

So, if one bitcoin is exchanged for another bitcoin, they will both have the same value. Additionally, NFTs are unique, so they have no equivalent value and are subject to market volatility.

Post a Comment

0 Comments

Contact Form