"Fungible" means "replaceable by another identical item, interchangeable". Digital assets such as images, gifs, or music files are inherently fungible — making an exact copy is easy. Non-fungible means an item is unique and can’t be replaced. NFTs are a way to make digital assets non-fungible. They introduce ownership of the file which cannot be copied. Generally, NFTs are unique data units with identification information and metadata stored on a blockchain network for security and verification purposes. They can be bought, sold or traded.
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[Alex 00:00] All right Mike, here's something that's kind of happening for the last little bit: NFT's. They’re popping up everywhere. Everyone's trying to get involved. Here's the crash course in the basics. So, what is an NFT?
[Michael 00:16] Well NFT is an acronym for non-fungible token. What? Admittedly that doesn't make an NFT any clearer. Fungible means replaceable. So, for example, a $100 bill is fungible, it can be replaced with another $100 bill, it can be replaced by two $50 bills or five $20 bills, it doesn't matter. Non-fungible means unique and can't be replaced. The Mona Lisa is non-fungible. A poster or recreation is not an acceptable replacement. So, with that being said, digital assets — images, GIFs, videos, music, text, whatever — are inherently fungible. They're all just a series of ones and zeros arranged in a specific way. In a nutshell, NFTs are a way to make digital assets non-fungible or at least less fungible. While digital assets can be copied easily and as many times as you want, precisely and exactly, NFTs give you something you can't copy, ownership.
[Alex 01:14] Yeah, I think bringing it back to the Mona Lisa. Anyone can own a print or recreation, but only one person can own the original. But do keep in mind that NFTs can be one of a kind, like the Mona Lisa, or like a trading card where multiple numbered copies exist. So technically an NFT is a token for a digital asset. This token is stored on a blockchain, which is basically a shared online database or ledger. It contains details about the digital asset, who owns it and who's transacting with it. Most NFTs make use of the Ethereum blockchain, which is linked to the Ether cryptocurrency. One way to look at it is NFTs are a way for creators to sell and promote their work. For buyers, it's a new way to support your favourite digital creators that come with the bragging rights of ownership.
[Michael 02:00] As an investment, things are a little less clear though. I guess what we are seeing is similar to any other speculative assets. We've seen NFTs go for multi-millions of dollars. The founder of Twitter, for example, sold an NFT of one of his early tweets for nearly $3 million. We've seen NFT art sell for more than actual fine art. And we're seeing companies and celebrities jump on the NFT bandwagon as well.