Non-fungible tokens (NFTs) are blockchain-based tokens that each represent a unique asset such as a work of art, digital content, or media. An NFT is an irrevocable digital certificate of ownership and authenticity for a specific asset, whether digital or physical.
The ability of one asset to be exchanged for another of the same kind is referred to as fungibility. The US Dollar is a practical example of a fungible asset because you can trade one dollar for another knowing the value is the same regardless of which dollar you have. Non-fungible assets are valued differently than fungible assets due to their unique characteristics and scarcity.
Baseball cards are an example of this, as each individual baseball card is assigned a unique value based on attributes such as edition number, design, player, and rarity. Baseball cards are not fungible because each one is valued differently and thus cannot be exchanged directly for another.
Finally, we can see that the technical blocks underlying NFTs are fundamentally linked to the innovation and fundamentals of blockchain technologies. To date, the Ethereum blockchain and associated standards are the most important technologies enabling NFTs. However, due to the high gas fees associated with it, developers must adapt and frequently innovate in order to deploy NFTs at scale.
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