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Home PC/ Laptops What is an NFT? The meaning of non-fungible tokens explained like you’re...

What is an NFT? The meaning of non-fungible tokens explained like you’re 5

“What’s an NFT?” It’s a query that’s been flooding Google’s search engine as folks attempt to uncover the which means of the buzzword. NFT stands for non-fungible token, however what does that even imply? Properly, earlier than I can clarify what “non-fungible” means, let’s dive into the definition of fungible.

“Fungible” describes a very good that may be simply swapped for one more good inside the identical asset class. For instance, if I swap your $100 for my 5 $20 payments, you possible received’t say, “Hey, that’s not honest!” as a result of they’ve the identical worth. As such, the US greenback is fungible. Cryptocurrencies like Dogecoin and Ethereum are fungible as nicely — you possibly can simply change one Bitcoin for one more with out stepping on any toes.

What are NFTs? (Picture credit score: Snappa)

Non-fungible, then again, describes a one-of-kind, distinctive good that may’t be readily exchanged for one more good inside the identical asset class. Non-fungible tokens are additionally indivisible (i.e. they will’t be divided into smaller denominations in the identical manner {that a} greenback may be cut up up into 4 quarters). 

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