What does non-fungible mean?
Fungible (that’s a funny-sounding word, no?) means something that is easily copied. So non-fungible means something that cannot be copied. If you lose a storybook, you can buy another. So your book is a fungible item. If thieves break into a museum and steal the Mona Lisa (a super-famous painting), it cannot be replaced because no other painting in the world is like it. So that makes the Mona Lisa a non-fungible item.
What’s a non-fungible token?
Whenever you're saving any information from the internet (be it an image, video, song, etc.), you’re downloading data. Data that any other person can also download.
An NFT is an asset in the digital world. It’s a piece of data from the internet that belongs to a person because they bought it with a lot of money. Usually, this data represents a piece of art, music, meme, GIF, etc.
The funny thing is that you can download the same piece of data that someone owns as an NFT (and paid millions of dollars for). What makes their NFT valuable is a record on blockchain that they, and only they, own the original version of this data.
How are NFTs created?
An NFT’s value is determined by who created it. If you or I turned a video of us singing into an NFT, it wouldn’t sell for much. But if a famous singer did so, then people, who are fans of that singer, would line up to buy it.
How are NFTs sold?
When an NFT is ready for sale, it goes up for auction on an NFT marketplace (basically websites where NFTs are sold). Many NFTs are sold for millions of dollars. Some multiply in value after being sold. Others, not so much. For example, an NFT of the world’s first tweet sold for $2.9 million. But when the person who bought this NFT tried to sell it a few years later, he couldn’t find any buyers. So you see, buying and selling NFTs is a risky business.
