What is NFT?
It stands for Non Fungible Token.
What is a Non Fungible Token?
The world of fintech, blockchain and cryptocurrency is full of jargon which can be a barrier for some people who are baffled by the techie terms used. In “Topp Jirayut on Cryptocurrency and NFT”, the Founder and CEO of Bitkub delves into fungible and non fungible to give us an understanding of what they are and how it all works.
Topp defines fungibility as being simply a property of money. Now let's take a look at the difference between fungible and non fungible tokens (tokens have actually been used since Roman times).
Anything that is “Fungible'' is divisible and standardized, as it is the same as the next token and is not unique.
The obvious example is any flat currency (i.e. the dollar or Thai baht). A 100 Baht note in Bangkok has exactly the same value as a 100 Baht note in Chiang Mai.
Non Fungible Tokens, on the other hand, are not divisible and are completely unique. Examples could include a car, a boat or house; physical assets that are one-of-a-kind. A flight ticket is also non fungible as it is for a specific person, on a specific airline, at a specific time, on a specific date. Non fungible tokens are unique, they cannot be replicated.
The Non Fungible Token example that Topp Jirayut uses is a microphone used by Michael Jackson before he died. The microphone itself might have been industry standard, something like a Shure SM 58 for example. What makes this particular microphone “Super Non Fungible”, regardless of make and model, is because it was used by Michael Jackson.
But how can we digitize “Michael Jackson’s Microphone” and upload it online?
If we simply took a photo and uploaded the photo, the image could be copied infinitum. Using blockchain technology, owners have the ability to represent an item of digital property or unique physical asset as a Non Fungible Token (NFT) that represents one single, unique unit.
As per the real world, cryptocurrency has two types of digital value; both fungible and non-fungible. But the real power of blockchain is its ability to fuel Decentralized Finance (DeFi) and it is the combination of Blockchain, Cryptocurrency, DeFi and NFT that is already disrupting the global finance industry and is set to cause a transformational shift in the way we live day-by-day.