Non-Fungible Tokens (NFTs) Foundations

Assets that are identical across all conceivable value metrics are termed “fungible”. Examples include Bitcoins and dollar bills, which are all worth exactly the same amount.

By contrast, Non-Fungible Tokens or NFTs are a special kind of crypto asset in which each token is unique. Because every NFT is unique, they can be used to authenticate ownership of digital assets like artworks, recordings, and virtual real estate, or even pets.

NFTs are digital representations of nonfungible valuables registered on a blockchain, each with a unique cryptographic identifier. The purpose of this identifier is to define the unique identity and ownership of the token on the blockchain, with real-time stamps of every transfer associated with that NFT. Right from the creation of an NFT transfers of ownership, every activity involving an NFT is recorded immutably on the blockchain, with timestamps for each transfer.

While there are endless possibilities for entities that can be represented as NFTs, they are typically used for digital works of art, like collectibles, images and videos. Today domain names, user profile avatars, virtual real estate, and even unique digital financial instruments are also being represented as NFTs.

Low-resolution images that look like emojis selling for millions of dollars, and several apparently irrational NFT purchases have shocked many people. The prices just don’t seem to make sense, if you view them objectively.

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