Do you guys know NFT? It stand for “non-fungible token”. NFTs are items, such as digital art attached to Cryptocurrency. It is a relatively new idea in the investment world.

I am sure that you guys have heard about Bitcoin. Bitcoin is one type of digital money. Together with other type of digital money, Bitcoins belong to a group called “Cryptocurrency”. NFTs are strongly related with Cryptocurrency, but they are completely different. Here is reason why.

NFTs are not fungible. Fungible means that they can be readily interchanged with something with same quality. For example, money, oil, and Cryptocurrency are fungible. Meaning that they can be interchanged: $5=$4+$1, 7L of oil=5L+1L+1L of oil, or 4Bitcoin=3Bitcoin+1Bitcoin. However, NFTs are not fungible because the item in which the Cryptocurrency is attached is one of  a kind. So, there are no other items in the world that are same in quality (Of course they can be copies of original item). Thus the item cannot be interchanged.

This is how it works. Cryptocurrency attached to an item represents the ownership of the item. In order to obtain the item, the buyer needs to pay the exact amount of Cryptocurrency that is attached to the item. By going through this process, the new owner of the item is born.

The point here is that the item is original. So the buyer acquires the ownership of the original item. For example, the picture I posted in this blog was taken from Google Image, but it is not original. The original one was bought for 69 MILLION DOLLARS in a form of cryptocurrency!!!