There’s a huge amount of buzz about this acronym, but what exactly does it mean?
NFT stands for ‘non-fungible token.’
‘Fungible’ means that two ‘things’ are identical and interchangeable. For example, if you have two $20 notes, they’re the same. They have the same value and it doesn’t matter which one you use.
However, if something is ‘non-fungible’ it is unique and irreplaceable. Like a signed album or an original artwork – once it’s been sold or traded, it’s gone.
Why are NFTs important?
Until now, you could use money to acquire and grow a digital collection of music, fine art, film, memorabilia... (and the list goes on). But since proof of authenticity was hard to come by, it was almost impossible to guarantee that you owned the original work of art from the original artist.
NFTs allow digital originals to be verified using blockchain technology – a decentralised digital public ledger that can never be changed, hacked or forged. Through a process called ‘minting’, a certificate of authenticity and provenance is attached to the original, so you can be assured of the true history of your purchase.
NFTs can take on many forms. You might be purchasing a work of art, an audio file, a video or even an experience. Blockchain also means that the artists who create your NFT masterpiece are rewarded for the original sale of their creations, as well as every time it changes hands in the future. A more equitable and fair compensation for their work and talents.
In short, NFTs are a game-changer. They make buying and collecting art safer and more reliable, and open new creative horizons for artists.