What Is A Nonfungible Token (NFT)?

A nonfungible token is a digital token. It is a unit of value built on top of an existing blockchain network. A digital token contains specific information that makes it different from other NFTs or assets and proves ownership of the digital asset — image, sound file, text, etc.

NFT is built and hosted on a blockchain, which is basically a digital transaction log. Blockchain is also the main technology used for cryptocurrencies. You can also visit https://rfyn.io/ to know more about NFT.

When an asset is said to be irreplaceable, it means it is not reproducible. This means the following:

• Each NFT is different from the next, so one NFT cannot replace another.

• As a digital asset, NFTs can be copied, downloaded, and shared, but the original NFT and proof of ownership are on the blockchain. You won't find an identical version of NFT anywhere else.

Image Source: Google

• NFT is verifiable, meaning that historical data stored on the blockchain certifies the original creator and owner of the NFT.

The "essential" components of NFTs are what gives them value. Think Vincent van Gogh's The Starry Night. Anyone can buy prints from a gift shop, but only the Museum of Modern Art has a painting by Van Gogh, and nothing else can completely replicate the original canvas. It also defines NFT: as a unique commodity.

How is NFT different from cryptocurrency?

Cryptocurrency is a digital or virtual currency that is used for transactions. Cryptocurrencies are protected by cryptography. In recent news, cryptocurrencies are gaining wide acceptance as more and more businesses accept them as payment for products or services from customers. Many see buying goods as a possible substitute for fiat currency these days, but that's still not the case.

NFT is more collectible and can be advertised. They are also protected by cryptography but are not used as currency. The main similarity between NFT and cryptocurrency is that they both live on the blockchain. They are also often used in the same circles and traded on the same exchange.

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