The full form is Non-Fungible Token. But what the heck does it mean. So there are 3 concepts by which we can understand NFTs better. After you read this blog, most of the questions regarding NFTs will be resolved.
The 3 concepts:
- Subjective vs Objective Value
- Fungible vs Non-Fungible Assets
- What are Tokens
1. Subjective vs Objective Value
Objective value are those values which are 100% true, unibased and balanced. Objective values do not change with respect to the vision of people.
Subjective Values are the opposite of Objective values. These values are those which doesn't show clear picture and it changes with person's outlook.
Let's understand it with an example: Suppose you want to travel from Los Angeles to United Kingdom through aeroplane. Now going through that plane and sitting in a seat of the plane is an Objective Value. To go to UK, you have to go by an aeroplane and you have to take a seat in the plane. But here also, there can be some people who are willing to pay more just to get the seat beside the window. That might be due to personal satisfraction or some other reasons.
Another example is that, if you play fortnite, you might buy skins of guns. It is also a subjective value, you buy that to get clout or to look cool or due to some other reasons.
And this is the same reason due to which people buy NFTs when they can download the digital pictures of those NFTs.
2. Fungible vs Non-fungible assets
Fungible assets are those assets which can be interchanged by the same same type. Money, Bitcoin are fungible assets. 1 Bitcoin can be interchanged with anouther Bitcoin.
Non-fungible assets as you have already guessed, are those assets which cannot be interchanges by that of the same type. If you sea NFT artworks on OpenSeas then you will notice that the artworks are unique.
3. What are Tokens?
Tokens are something which can be physical or digital which can be exchanged for a good servise or other form of value or utility.
WHAT IS AN NFT?
NFT of a Non Fungible Token are those token which have a value and they cannot be traded for their same type.
But for how long the digital NFT artworks will be bought by people? What is the need?
The answer to this question is very simple. The "being cool" culture and the "clout" culture will increase if not decrease. Thus people will buy the NFTs to be cool in front of others or to get clout or that might be a sense of personal satisfraction. Another reason can be the incoming METAVERSE. One can buy NFTs and showcase them in their virtual house or museum. You can also generate an income by selling those NFTs at higher prices or just creating a membership ticket for your people.
I hope that all the basic questions regarding NFTs are resolved and if you have any questions, then you can just put it up in the comments section. I would love to answer them.