Leopoldo Moreno de la Cova
Communications Manager
May 9, 2023
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Non-fungible tokens or NFTs are relatively new types of digital assets that are designed to represent ownership of something unique and scarce, whether they are tokenized physical assets, rare digital resources, stocks or virtually anything else.
NFTs are unique, i.e. no two are alike, which means that it is not possible to replace an NFT with another identical token. This is a property known as "non-interchangeability" and is enforced by smart contracts that prevent duplication, whereas public blockchains allow for provable scarcity. e.g. a work of art.
However, fungible tokens are those that are perfectly interchangeable, for example a one euro coin, which is perfectly interchangeable for another one.
The fact that NFTs are unique and that their rarity, desirability and utility are variable has given rise to a highly sought-after market around NFTs, with collectors and dealers buying and selling NFTs for values set by speculation, supply and demand, as well as other factors. Like many collectibles, NFTs are worth as much as someone is willing to pay for them, which can amount to considerable sums.
Non-fungible tokens are also known as collector cryptocurrencies, and are key components of the new blockchain-based digital economy. In the world of decentralized applications (DApps), they can be used to generate unique digital items. Which can be investment products, collectibles, art or any other product of some significant value.
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