On the other hand, a piece of art like the original Mona Lisa is not fungible, and cannot be exchanged like-for-like due to its unique properties. Fungibility is the property that determines whether or not one item can be interchanged with other items of the same kind with no loss of value.įor example, cash is fungible in that you can exchange one €10 note for another, or even for two €5 notes, and still retain exactly the same value. The key difference between NFTs and other cryptographic tokens is that NFTs are not fungible – hence the name non-fungible tokens. This smart contract assigns and tracks ownership of the underlying item, manages the NFT’s transferability, provides details of the NFT’s unique properties, and can set terms and conditions for its use. The most common items currently offered as NFTs include digital art, virtual trading cards, and in-game assets, but physical items like luxury watches or even real estate can also be “tokenized”.Įach NFT that is created is powered by a smart contract stored on a blockchain. Why are blockchain and NFTs so intrinsically linked?Īn NFT is a digital token that represents ownership of a unique digital or physical item.In this short video, we explain what NFTs are, the concept of fungibility, what blockchain brings to NFTs, and how an industry standard is making it easier for businesses to harness the power of NFTs.įor those of you who prefer to read, here are the video’s key take-aways:

Blockchain use-cases Non Fungible Token (NFT)

Non fungible tokens nfts