NFT - What does it stand for?

🌐 What does NFT stand for? What does it mean? Non-Fungible Tokens are quite easy to understand and are a very small concept with a major impact. Understanding what NFT stands for is the first step in getting into the world of NFTs. Follow me and learn about the technical background, the good and best practices of NFTs and how everything is connected with blockchains and cryptocurrencies. 00:00 Intro 00:15 Interchangeability 00:51 Unique Items 01:31 On the Blockchain 02:25 More important questions What is the difference between a fungible thing and a non-fungible thing? Let’s take a coin for example. This coin is valuable. It has exactly the value of 1 Euro. But it is interchangeable! I can switch this Euro coin with another arbitrary Euro Coin because they have precisely the same value. They are “fungible” or interchangeable. You could say the same about bitcoin. My bitcoin has the same value as your bitcoin and by definition, it will never happen that your bitcoin becomes more valuable than my bitcoin because they are 100% interchangeable, or fungible. But there are items in this world that are not interchangeable, like this cup for example. This cup was hand-painted by my sister. It has the first letter of my name on it and the comet from final fantasy 7 on the back. This cup is one-of-a-kind, a unique piece with a unique value for me. If you wanted to exchange your cup with my cup, I wouldn’t agree because my cup has a unique value for me that your cup does not. This cup is “non-fungible”. I don’t know if anyone would actually use this word in this context but that’s basically what it means. So a non-fungible token is a unique thing with a unique value that is not interchangeable. Now - Non-fungible tokens are unique items on the blockchain. And yes, I am explaining one technical term with another. But bear with me. You don’t need to understand the details of the blockchain for this. Just understand that the blockchain is a worldwide distributed database to which anybody has access. My NFT is one entry in this global database. If I create an entry in this blockchain-database for my cup, it will be assigned to me, or better: to my user-id on this blockchain and so the whole world will see that this token, or entry in the database is assigned to me. Now if you offer me, let’s say, a million dollars to buy this cup, I can change the ownership-entry on the blockchain to your user-id and therefore this unique token would then belong to you. Then we would have traded this Non-fungible token. In other words, an NFT is basically an entry on the blockchain. Or a pair of numbers in a worldwide distributed database. That is the simple answer to what NFT stands for but it opened up so many more questions like, what does this token on the blockchain has to do with my cup? Or does trading this NFT automatically imply legal ownership to this cup? Or how does this worldwide distributed database called “blockchain” work? Or why are NFTs traded for millions of dollars? For all of these questions, I will deliver answers, so consider subscribing and leave me a comment with your questions so that I can answer them. Stay Awesome!