Non-Fungible and they are Tokens
Hence the term - NON-FUNGIBLE TOKEN
So what does it mean for something to be Non-Fungible?
Fungibility means two or more of one thing are all alike, for example, a $1 note is exactly the same as another $1 note, 1 BTC has the same components as any other 1 BTC on the bitcoin blockchain and therefore can be interchangeable and divisible.
Your clothes, cars, land, friends, etc, are not fungible, they can’t be interchanged and possess the exact same qualities, especially because of the issue of ownership. If I lent someone a red dress, they can’t return another red dress to me, they have to return that exact red dress with all the features it possesses, the feature of my ownership included. I own it, and I want that exact dress I own.
If I wanted to give out that red dress as a gift, I’d have to forfeit my ownership to it, I can’t divide my dress into pieces and give someone else as a gift, if I wanted them to have it, I'd have to give it to them, whole.
NFTs are indivisible (well at least for now because there are platforms where they can be divisible).
QLIP's DEFINITION OF NFTs
Non Fungible Tokens are simply data like:
These are data are stored on the blockchain that is unique and indivisible but possessing intrinsic and or aesthetic values. NFTs make it possible for art and any data to be tokenized, therefore any data possessing intrinsic and attributed aesthetic value can be tokenized.
.Intrinsic value means that an NFT gives direct access or utility to the holder. Attributed aesthetic value is basically the emotional attachment the NFT holder gives to an NFT because of the artist, brand story, or experience behind it.
THE TECH EXPLANATION OF NFTS
Let’s approach from a more tech-savvy perspective.
Why are NFTs called tokens?
Tokens are cryptocurrencies created on an already existing blockchain, they don’t have their own blockchain, whereas Crypto Currencies or (like Sorochukwu says), Coins have their own blockchain.
For example, BNB isn’t a Token, it is a Coin because it is built on its own blockchain and the fees for interacting with that blockchain are charged in BNB.
$QLP on the other hand is a token built on Binance Smart Chain.
This doesn’t mean crypto tokens are less valuable or will do badly in the market, they just don’t have their own blockchain.
The reason NFTs are called tokens is that they are a version of Cryptocurrencies existing on an already existing blockchain.
Any token can be created on the blockchain and be given value if it has a great community and great use cases behind it, Tokens created are simply lines of codes with instructions on the blockchain that govern its basic features. NFTs are the same thing, except that they contain DATA!
Caleb describes NFT in a more technical sense.
Writer: Caleb Alikwe
A Non-Fungible Token is a special type of cryptographic token which represents something unique; NFTs are thus not mutually interchangeable, they are scarce digital assets connected to a token and put up on the blockchain;
NFTs = Digital Asset + Token stored on a blockchain.
Non-fungible tokens are rare unique digital assets that are connected to digital certificates (Tokens) and stored on the blockchain.
Non-Fungible Tokens (NFTs) are unique digital items with blockchain-managed ownership.
Fungibility refers to the property of an asset whose individual units are interchangeable and essentially indistinguishable from each other e.g Naira notes, Dollar notes, Bitcoin, Ethereum.
FEATURES, STANDARDS & TYPE OF NFTS
FEATURES OF NFTs
Uniqueness: Each Non-Fungible token contains metadata specific to that particular token, this metadata describes what makes this asset different from others in the same collection as itself and others, the metadata is a permanent and unalterable detailing information about the NFT.
Guaranteed Ownership: Non-Fungible tokens bring full assurance of ownership to collectors as the information and provenance of the asset is stored on the blockchain and can be easily queried to verify.
Provenance: Non-Fungible tokens bring a new dimension to provenance as individuals are able to query the full history of an NFT from its creation to its current owner alongside, time of creation, the material used in the creation, information about the creator, and more.
Rarity: Non-fungible tokens are designed to be of limited supply due to their specific and detailed nature. This construct in the design brings about demand as more individuals are trying to own a limited-edition asset.
Programmability: Non-Fungible tokens enable a wide range of programming thereby giving their creator different avenues to experiment and set up complex mechanics like forging, crafting, redeeming, random generation, and more.
Interoperability: Non-Fungible tokens standards allow non-fungible tokens to move easily across multiple ecosystems thereby opening new means of utility and trading which is made possible through clear, consistent, reliable, and “permissioned” API for reading and writing data.
STANDARDS OF NFTs
Standards are specifications in which non-fungible tokens are created as they give developers the guarantee of their assets to act in specific ways alongside describing exactly how to interact with the basic functionality of the asset.
Here is a list of Non-fungible token standards across some blockchains;
Binance Smart Chain: The non-fungible token standard on the Binance Smart Chain blockchain includes – BEP 721, and BEP 1155.
Ethereum: The non-fungible token standard on the Ethereum blockchain includes – ERC 721, ERC 1155, and ERC 998.
Tezos: The non-fungible token standard on the Tezos blockchain include – FA2 (TZIP-12)
Near: The non-fungible token standard on the Near Blockchain includes – NEP-4 and NEP-171.
TYPES OF NFTs
Fully Centralized: These are NFTs that don’t have their information or metadata and assets stored on a public blockchain where individuals can query and see transaction history, total supply, etc. An example of this type of NFT is the NBA Top Shots.
Pointers:This type of NFT has its certificate of provenance stored on a public blockchain but with its asset stored on either a public server or a decentralized server.
Fully On Chain: This type of NFT has its certificate of provenance and asset stored on the blockchain.