What is an NFT?

If you’ve been reading about the cryptocurrency world, you’ve probably heard of something called an NFT and how the market surrounding these tokens is taking off. But what exactly is an NFT? And why would anyone buy one?

What is an NFT?

The letters NFT are an abbreviation, and they stand for non-fungible token. The word non-fungible basically means ‘not exchangeable’ and thus, a non-fungible token is a token which is not exchangeable on a one to one basis.

This doesn’t mean that one cannot exchange an NFT for money, it just simply means that there is no universal value which one can peg to every NFT. Each NFT will have a value which is unique to it, and its buyer. Think of NFTs as the fine art of the cryptocurrency world. Just as the value of a painting changes based on when, where, and to who it is sold to, NFTs also are able to change value based on different circumstances. Besides just digital paintings, NFTs can also be music, videos, and even tweets from sites like Twitter. 

Where are NFTs Found?

As mentioned above, NFTs are basically digital art. This means you would find them in online marketplaces for digital art. But this isn’t the only place you can find NFTs, as they can often be found in the video gaming world. This is because, in the modern day, there are a number of upgrades, such as outfits and weapons, which you can buy for your digital characters in several video games. These outfits and weapons are NFTs.

Who Can Make an NFT?

NFTs are built on various blockchains such as Ethereum and Tezos. This means anyone who has access to an NFT creation platform, and has a small amount of ETH or XTZ, can create an NFT. An example is the artist Grimes, who created a bunch of  NFTs in the form of unique digital renderings, and sold them in an online auction in February 2021 for over $6 million. 

For more information about NFTs and their implications in the business world, visit Stably’s website.