“Non-fungible” basically indicates it’s one-of-a-kind and can’t be substituted with anything else. A bitcoin, for example, is fungible, meaning you can exchange one for another and get precisely the identical item. A one-of-a-kind trade card, on the other hand, cannot be duplicated. You’d get something altogether different if you swapped it for a different card.
Most NFTs are, at a high level, part of the Ethereum blockchain. Ethereum, like bitcoin and dogecoin, is a cryptocurrency, but its blockchain also enables these NFTs, which hold additional information that allows them to function differently from, say, an ETH coin. It’s worth mentioning that various blockchains can use NFTs in their own ways.
Any readily copied digital material, such as photography, art, music, films, tweets, and even memes, can be saved as an NFT to identify the original copy. NFTs can be made out of nearly anything unique that can be digitally saved and has value. They’re similar to any other collector’s object, such as a painting or a vintage action figure, only you’re paying for a file and documentation that you own the original copy rather than a tangible thing.
The blockchain ledger can verify an NFT’s unique identification and ownership. They were initially introduced on the Ethereum blockchain, but they are currently supported on other blockchains like FLOW and Bitcoin Cash. Whether the actual file is a JPG, MP3, GIF, or something else, the NFT that indicates its ownership may be purchased and sold just like any other piece of art – and the price, like real art, is primarily determined by market demand.
In-game purchases in video games are being shaken up by NFTs. Until, all digital assets purchased within a game remained the property of the game maker, with gamers purchasing them to use temporarily while playing the game. However, NFTs imply that asset ownership has transferred to the buyer. That means they may be purchased and sold throughout the gaming platform, with additional value-added depending on who has possessed them previously. NFTs are increasingly being used as the only basis for whole games.