In the cryptocurrency market, the number of tokens continues to grow daily; they were fungible tokens, but recently, a new trend has burst into the cryptocurrency world – NFT tokens. Today we will explain fungible and non-fungible tokens in simple terms, how they differ, and the best choice for investments.
The token itself is a digital coin. Many have heard about the existence of bitcoin, altcoin, and ether on the cryptocurrency exchange, so they are fungible tokens, “fungible tokens.” Fungibility means that one bitcoin is always equal to one bitcoin. For example, if you take a banknote of 100 rubles, it will always be equal to any other banknote of 100 rubles or even two banknotes of 50 rubles, one way or another; these are fungible assets. With NFTs, it’s a different story – non-fungible tokens are unique.
A non-fungible token is a digital certificate that is issued in a single copy, which means it has a special value. An NFT token is a unique object represented as art, music, video, etc. Each non-fungible token is assigned a seal of authenticity, and the NFT buyer, in turn, receives an exclusive right to the product.
Even though NFT tokens appeared relatively recently, they continue to gain popularity; many investors have stopped investing in digital coins known to us and started paying attention to non-fungible tokens. Unlike ordinary tokens, non-fungible tokens cannot be counterfeited, replaced, or divided into parts, which creates excellent opportunities for their creation and sale. They also open broad prospects for investment; by tokenizing tangible assets, investors can have greater liquidity.
Where are NFTs used?
Now NFT tokens can be found in many areas – games, licensing, and collectibles. One of the most used areas where you can create, buy and resell non-fungible tokens is digital art. Unique art that exists only in digital form can bring a lot of money, so more people are studying this system and investing in crypto art. With crypto art’s advent, artists and buyers of works have benefited. The former got the opportunity to sell their works at a bargain price on the world’s most excellent platforms, and the latter acquired exclusive genuine art protected by the blockchain. At the moment, there are many platforms for buying and selling non-fungible tokens in the form of crypto art: OpenSea, Rarible, SuperRare, MarkersPlace, and others.
NFT tokens, like fungible tokens, have their advantages and disadvantages, however, despite the modest market volumes, the popularity of non-fungible tokens continues to grow, and in the future, the NFT sphere has great prospects.