Non-fungible tokens, or you can say NFTs are cryptographic assets designed with blockchain technology. Each NFTs are unique and cannot be traded or exchanged like cryptocurrencies. A non-fungible token is a piece of information on a virtual distributed ledger known as the Ethereum Blockchain. The reason why the word “fungible” is there because NFT is cannot be destroyed or replaced. It will be worth more than its actual value in the future. For instance, Bitcoin is one non-fungible item that can be used for transactions in the future.
NFTs are part of the Ethereum blockchain which is a popular cryptocurrency after bitcoin. It uses blockchain technology to verify the transaction and give rights to the buyer.
As time goes by its value increases because it is a finite resource. On the other hand, a non-fungible item or token, such as a digital card or a digital painting can not be destroyed, and therefore it is worth more now than it was before.
WHAT YOU NEED TO KNOW
NFTs are unique tokens on a blockchain
NFTs cannot be replaced with any other items
NFTs can be used with real-world items, painting, or a music album
NFTs reduced fraud
NFTs can be used to share the rights of any property or service
How valuable is a non-fungible token?
Therefore, tokens have a certain value even though they cannot be destroyed or altered in any way. Non-fungal tokens have a decentralized nature. Their value does not come from being able to destroy them but from being able to collect them. This is why they are such a great alternative to products that have no underlying value. People trust the token and value it because it represents something that it could otherwise never have.
Non-fungal tokens are a good example of how adding a decentralized element to something increases its value and prevents it from becoming worthless. The more decentralized a product is, the more trust it will have from its users and the more people will be willing to pay for it. As more people start to see the value in the token, the value of the decentralized aspect of it will increase as well. This means that in the future, tokens will be able to replace money completely.
This is truly a revolutionary concept. By creating a token, people are actually creating a product that has the ability to keep increasing in value without the need to go through any commodity production process. People will actually be creating a new type of money that is backed up by nothing but a community effort.