Fungibility is a desired aspect of any currency that aims to be a store of value, medium of exchange, or unit of account. In cryptocurrencies, fungibility is important to maintaining legitimacy of the currency’s interchangeability between units.
Recently, a new type of token known as non-fungible tokens (NFTs) have come to the forefront as an important and unique asset that has some interesting applications.
What Exactly Are NFTs?
An NFT is essentially a unique representation of an asset or good in the form of a virtual token. Through cryptography, they help to verifiably prove ownership and authenticity of an asset. For example, a virtual piece of art where the artwork is tokenized and ownership of the token directly reflecting ownership of the piece of art, immutably stored on the blockchain.
NFTs are unique and cannot be replaced by another item. The implications of this in a distributed medium without centralized authority are wide ranging and will enable a future class of digital assets, from fractionalized ownership to…