Ask Doctor Blockchain - What are NFTs?

Updated: Feb 2

What are NFTs and what makes them so special?




NFTs


A fungible asset is an asset, in which its units are interchangeable, and something even indistinguishable. For example, one-dollar bills are interchangeable - each one-dollar bill is worth the same and it does not matter which one-dollar bill you use to pay for goods or services.


However, they may not be indistinguishable, as each one-dollar bill has its own serial number. On the other hand, one ounce of gold is both interchangeable and indistinguishable.


Unlike fungible assets, each unit of a non-fungible asset is unique, and thus not interchangeable or has the same value. A good example would be a painting of an artist. Not only is a Rembrandt painting unique and different from a Picasso painting, but also each Rembrandt painting is unique and the same applies for each Picasso painting.