Learn the terms
5 min
An NFT, or ‘non-fungible token’, is a unique, digital certificate that is stored on a blockchain. An NFT provides ownership rights in a digital asset.
Working backward, an NFT is:
A token (unique digital certificate) that isn’t fungible (i.e. interchangeable with an identical item)
In other words, unique tokens that are stored on a blockchain.
A token (unique digital certificate) that isn’t fungible (i.e. interchangeable with an identical item)
In other words, unique tokens that are stored on a blockchain.
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The first part of that statement is pretty important. NFTs are unique, meaning one does not equal the other in the way dollars or bitcoins do. That’s what non-fungible means.
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To live on a blockchain is to live on a digital ledger verified by all computers that cannot be disputed or changed. It is a single, decentralized source of truth.
An NFT is created or ‘minted’ — deriving from the traditional term — using a smart contract containing specific and unique information (stored on the blockchain). Because of smart contracts, you can think of NFTs as unique digital certificates of ownership and authorship.
Non-fungible tokens are stored in digital wallets. Without a digital wallet, you have no way of interacting with NFTs (aside from looking at them). But once you create a wallet, the world is your (observant) oyster. You can buy, sell, transfer, and mint NFTs using your wallet.
Sometimes, this costs a gas fee, which is the fee you pay for the computers in the network to push your transaction through.
If the NFT exists in your wallet, you are the indisputable owner of said NFT. You may do what you want with it — nobody is going to take it away from you or tell you it isn't yours.
Individual's wallets are public and accessible by anyone with internet access. Because of this complete transparency, the authenticity of an NFT is always verifiable. NFTs allow us to truly own our content.
Web3 is the trustless web — a world that empowers us to make independent financial decisions without ever needing to “take anyone’s word for it”. Everything is provable. I don't have to trust a brand to send my money for me. I don't have to trust a vendor’s word that that file is what they say it is. I don't have to trust big tech not to lose, use, or sell my data. It's all distributed, code based, and free from middlemen.
As DC investor, a Twitter-famous NFT collector and avid DeFi supporter, once said:
“The value of the Ethereum isn’t that it’s a global cloud computer… rather it is a general purpose, shared source of truth which everyone can agree on, while remaining censorship-resistant and tamper-free with no one “controlling” it.”
“The value of the Ethereum isn’t that it’s a global cloud computer… rather it is a general purpose, shared source of truth which everyone can agree on, while remaining censorship-resistant and tamper-free with no one “controlling” it.”
