Before talking about the goods that are NFT based and why it’s beneficial to own them, I personally feel that it is crucial for us to go back to the roots and understand what NFT is and what it is used for. But before I begin with my article, be sure to check out AIO Metaverse, an NFT developer in Malaysia for more information.
What does ‘fungible’ mean?
To start off, you must understand what NFT is. NFT stands for non-fungible tokens. Before diving in, you must first understand what the term ‘fungible’ means. The term fungible means that it can be exchanged. Hence, when someone says that something is fungible, it means that that item can be exchanged with something else of the same value in the same category.
For instance, in terms of money. When I exchange my RM10 with someone else who gives me two RM5, the value is the same. Since the base value remains unchanged and you still end up with RM10, it can be considered fungible. Similarly, if I exchange my $1 bill with your $1 bill, it remains the same since they are both exchangeable and the value remains the same.
What does ‘non-fungible’ mean?
Similarly, the opposite of this is called non-fungible. This means that the item is something that cannot be exchanged for something else in the same category. Take for instance the infamous piece of art called “Mona Lisa” by Leonardo da Vinci. Although people have attempted to recreate it and there are many imitations out there, there is only one original piece.
What are ‘non-fungible tokens’ NFT?
Non-fungible tokens are digitally represented assets, at the same time, they can also be used to represent real-world objects such as art and real estate. These real-world tangible goods can be “tokenized” to make purchasing, selling, and trading more efficient. And since non-fungible tokens are known as original, unique and one of a kind, they also serve to lower the risk of fraud. NFTs can also be used to represent people’s identities, property rights, and other things.
NFTs are essentially digital versions of tangible collector’s artefacts. Currently, NFTs are most commonly in the form of artwork, music, GIFs, pictures and so on. As a result, rather than receiving an actual oil painting to put on the wall, the customer receives a digital file.
They also obtain exclusive rights to the property. That’s right, NFTs can only have one owner at a time. Because NFTs include unique data, it’s simple to verify ownership and transfer tokens between owners. They can also be used to hold specific information by the owner or author. Artists, for example, can sign their work by putting their signature in the metadata of an NFT.