The full form or meaning of NFT is Non-Fungible Token.
It is a type of digital ownership knowing or possession process, which proves the ownership of a digital or physical item.
Like Cryptocurrencies, Non-Fungible Tokens also work on Blockchain technology where all types of ownership and transaction information are available to everyone on that Blockchain.
What is the meaning of Non-fungible?
The word non-fungible means that which we cannot replace, or which we cannot change.
a thing or item that we cannot replace with another thing or item, because there is something special in that thing or item, which is only in that thing, it is completely unique in this whole world.
so in easy words, we can say that-
Non-Fungible = Non Replaceable
Non-Fungible = Non-Exchangable
Now the question arises here that when any physical or digital item cannot be replaced or when it cannot be exchanged?
So that happens only if there is something unique in that physical or digital item which is only in that item in the whole world.
we will try to understand fungible and non-fungible terms by this two day to day life examples-
fungible or exchangeable item-
Let’s say I have a ₹500 note, which I exchange for 5 notes of ₹100 from a shopkeeper.
When I had one note of ₹ 500, its value was still the same, and now when I have five notes of ₹ 100, its value is still the same, so we call such an item fungible.
Let us try to understand it better with another example, suppose my friend and I bought two cricket bats of the same brand from the same shop, which cost ₹2000.
Whenever we both used to play cricket on the cricket ground, we both used to exchange each other’s bats and it did not matter to us.
This means this bat was exchangeable or fungible.
But one day I met Sachin Tendulkar and he gave his autograph on my cricket bat, now if my friend wants to exchange his cricket bat with me, will I do it, not at all.
now, this cricket bat is non-exchangeable, ie non fungible. It has been made non-fungible because it is unique in the whole world, as Sachin Tendulkar has autographed it.
Non-fungible item is called such a physical or digital item, which is unique in the whole world.
Like the painting of Monalisa is a non-fungible item, because the original Mona Lisa painting is the only one in the whole world, and this painting cannot be exchanged with any other painting.
What is the meaning of Token in NFTs?
Token in NFT means ownership or rights.
Suppose that the NFT i.e. non fungible token of a house is in the name of Amitabh Bachchan, then the owner of that unique property or house is Amitabh Bachchan.
Let’s try to understand it with a simple example
When you travel in a metro, you have a token, that token represents your right to travel
Similarly, in NFT, token means right or ownership.
So in the same way, if we have any unique digital content, such as a photo, or a video, then our ownership will be proved through a token.
That is, the token will prove our ownership of that digital content.
Just like if we buy a house, we get a physical paper for its registration and ownership, similarly, we will get NFT i.e. non fungible token of our digital content, which will prove our ownership on that digital content.
What is Blockchain in NFTs?
Blockchain in NFT is a group with which the information of that NFT is shared.
We try to understand it with an example to better understand Blockchain in NFT
Suppose I want to transfer ₹ 100 to my friend in his bank account, then when I start this transfer process from my mobile, then my bank will first check whether I have ₹ 100 or not and if If I have ₹ 100 in my account then my bank will transfer that ₹ 100 from my bank account to my friend’s bank account.
Then my friend’s bank will check whether he has received ₹ 100 or not and if he has received that ₹ 100, then he will update this information to my friend that he has received ₹ 100.
So here this transaction happened with the cooperation of two banks but in NFT there is no need for a middle mediator i.e. bank or any other person.
Directly two people can do transactions between themselves because here all the information is public i.e. available to all the people of that group or blockchain.
So this means if I want to send ₹ 100 to any of my friends through NFT then there will be no need for a bank here.
Directly I will be able to send money to my friend and all the transaction information will be available to all the people in the group of blockchain we have created.
Suppose if there are 500000 people in that group then all 500000 people will know that I sent ₹ 100 from my account to my friend, so this whole process is considered more transparent.
Similarly, if I have any digital content which I have done NFT, then its information will be with all the people who will be in my group, that is, in the blockchain
So that’s why if someone wants to buy that digital content of my blockchain, then he can buy it directly from me, because he will be knowing about the ownership and also knowing me through that blockchain i.e. group
Frequently asked questions about NFTs-
What is the future of NFTs?
The experts are very excited about the bright future of NFTs.