Throughout this guide we are going to refer to a non-fungible token as an NFT. You may have heard of
this term recently as NFTs are making the headlines across the world. There are people spending a lot
of money on NFTs and we will explain how this happens and how you can get in on the action.
There has literally been a very quick emergence of NFTs during the last year or so. It seems that there
is an endless desire to acquire these digital assets and that people are prepared to pay crazy prices to
take ownership of them. Some experts are saying that the NFT bubble will quickly burst while others
believe that they will be around for a long time.
A Unique Digital Asset
An NFT is a unique digital asset that is a representation of an object in the real world. One of the most
common types of NFT is digital art. But NFTs are not limited to this. People buy and sell NFTs online
and they usually use cryptocurrency like Ethereum or Bitcoin to do this.
NFTs have actually been around for around 7 years now. Since 2017, people have spent over US $170
million on the purchase of NFTs. When we say that NFTs are unique this is not always the case. It is
possible to have a limited run of the same NFT. Each of these will have its own digital code which is
where the uniqueness comes in.
An NFT is a unique digital asset that cannot be directly replaced with another asset. This explains the
“non-fungible” aspect of its name. In contrast, a fungible token can be replaced by another that is
identical to it. Cryptocurrencies such as Ethereum, Bitcoin and Litecoin are all fungible.
Think about fiat currency here. One-dollar bills all have unique serial numbers on them but it is easy to
replace a one-dollar bill with another one-dollar bill. You cannot copy an NFT. Most digital files van be
copied and are not unique.
Page 5 of 36
https://anchor.fm/gettingsociallocal
Visit us at http:/nusinesstoday2020.square.site
