New tech is filled with terms and acronyms that are seemingly designed to keep out the technologically uninitiated…

Let’s fix that.

What are non-fungible tokens (NFTs)?

Think of “fungible” as interchangeable.

Something fungible, such as fiat currency, can be exchanged or replaced. It’s easy to exchange a U.S. $100 bill for twenty $5 bills. Fiat currency is interchangeable within each denomination.

So then, think of “non-fungible” as not interchangeable.

NFTs are—unsurprisingly—non-fungible. Meaning NFTs can look identical to each other, but they are not interchangeable.

That’s because NFTs are assets that have been tokenized via a blockchain. A blockchain is basically a digital ledger of transactions. Each NFT is assigned a unique identification code that distinguishes it from other NFTs.

Are you now wondering why we need NFTs?

Because consumer demand for virtual merchandise has escalated with the advent of Web3 and the Metaverse. NFTs have arisen as a digital asset to satisfy that huge shift in consumer behavior.

Now perhaps you’ve noticed the art and entertainment worlds are enamored with NFTs, in the form of digital art.

But can anything else be created as an NFT?

Absolutely. NFTs are expanding far beyond digital art. NFTs are spreading into art, music, fashion, entertainment, sports, live events and much more.

So while NFTs often represent real-world objects such as video, trading cards and even this blog post (thanks Mirror!), NFTs can also be physical or service-based items.

In fact, there are many NFT use cases across almost every industry, from event ticketing to vehicle maintenance history to supply chain management.

This means NFTs could have practical applications that have utility in our “real” lives, including:

• Ensure online product authenticity by scanning a QR code to see the product’s history from manufacturing to shipping.

• Transfer real estate land deeds and provide proof of property ownership.

• Verify vehicle history so buyers have full transparency into the history of a used car before they decide to make the purchase.

• Track product supply chain from manufacturing all the way through shipping and delivery.

• Solve problems with ticketing fraud for concerts, sports events and parking passes.

Why do NFTs have value?

Held on the blockchain—again, a digital ledger—NFTs are information and code that have digital identifiers that are easily verifiable.

Thus, NFTs are digital certificates that show proof of ownership for any assets attached to the NFT.

The big news here then is that, for the first time on such a worldwide scale, we can give digital items scarcity. Again, that scarcity comes from the fact that each NFT can be proved to be unique.

As well as being unique, verifiable and with the potential to create scarcity, NFTs have the power to create vibrant communities for holders, link physical products and even create experiences in the real world.

As each NFT is unique, so too are the associated benefits of holding an NFT. For example:

• Do you want access to VIP chats with your favorite musician? Holding an NFT could give you that.

• Do you want to own a physical asset with added benefits like Metaverse wearables? Holding an NFT could give you that.

• Do you want access to an art exhibit in the real world? Holding an NFT could give you that.

• Do you want royalties paid to you whenever your artwork is sold and resold? Creating an NFT could give you that.

Are you ready to buy your first NFT?

NFTs are bought and resold online, generally using cryptocurrency, through marketplaces such as RealNifty. Be sure to do your due diligence before deciding on a marketplace, to ensure you’re purchasing through a legitimate source.

NFTs are already mind-blowing. And yet, remember that we’re still at the beginning of what NFT technology can offer.

As more people discover the potential value and community-building properties of NFTs, more and more types of NFTs and their associated experiences will be created.

Are you ready?

By Vinitia Swonger