Introduction
Nonfungible Tokens
Non-fungible Tokens or NFTs, are easier to understand when you understand their opposite, Fungible Tokens. So I will start by explaining them, and then explain non-Fungible Tokens.
Body
Fungible
- The word Fungible in reference to cryptocurrency tokens means that each cryptocurrency token is exactly the same in size and appearance, basically interchangible and most importantly worth the same.
- This means I’m terms of value and utility, they are the same.
- This means that if a take a fungible token like Bitcoin and trade you the one bitcoin token in my wallet, for the one bitcoin token in your wallet, the value and appearance of the token in our wallet looks unchanged. It would be like you and me exchanging one dollar bills. The bills look the same, their value is the same, and for all intents and purposes they are the same and interchangeable.
- In fact these qualities are eseential to their function.
in a utility and value sense they are interchangeable. - For example, just like you and I can exchange dollars we have in our wallets, because they are interchangeable.
Non-fungible Tokens
- A non-fungible tokens*, which are frequent called NFT’s, are cryptocurrency token which are each created to be unique, and to represent something unique.
- These characteristics where each cryptocurrency token represents something unique, and thus they are not interchangeable is called non-fungibility.
- They are not the same, and they are not interchangeable.
- For example a NFT could be a single copy like a NFT which contains contain a picture file, which is the only digital picture in existence of your mother. Because only one was created, thats it.
- Or a NFT could be one of a limited production series of pictures of your mom, numbered 1000, 1001, 1002, 1003… 1009. This means even though each is a picture of your mom, and they are unique because they each have a different number. Additionally you could make the picture in each one slightly different, but still a picture of your mom, like with blue hair, or green hair, or a moustache or glasses. So each token is unique because they each have a unique number and they have a slightly different picture of your mother. Or each could have a unique and different colored background or unique colored border.
- Now we have defined non-fungible, the opposite term of fungible.
The End
Last words
- These terms are simple to understand and they convey valuable knowledge in the cryptocurrency space. So committ it to memory, because NFTs could make you wealthy one day.