Everyone has collected something at some point in their life: old coins, vinyl records, stamps or even important works of art with great economic value.
As a result of this, but taken to the virtual world, there is a need to safeguard the ownership of virtual assets with NFTs, which act as digital certificates of authenticity through blockchain technology, the same technology used for cryptocurrencies. If you want to know more about what NFTs are and what their characteristics are, keep reading.
What are NFTs and what are their characteristics?
The concept of NFT comes from combining the words in English: Non Fungible Token . However, before going into exactly what an NFT is, it is worth first explaining the difference between fungible goods and non-fungible goods.
Difference between fungible and non-fungible goods
In the legal and juridical context of our country, a distinction viber data is made between both types of goods to discuss which can be exchanged with each other and which cannot .
Fungible goods: those whose value is linked to a number, measurement or weight. That is, their value depends on the value to which it is associated . One of the best examples that help us understand the idea of a fungible good is money. This is a fungible good for several reasons. Firstly, because it can be exchanged for another fungible good of the same type. That is, we can exchange a 50 euro note for another equal one since it will not have lost value in this transaction. Likewise, it is a fungible good because it runs out when we use it. That is, if we buy a video game with that 50 euro note, it will have disappeared because we will have consumed it.
Non-fungible goods: The best example to define them is works of art. Because these are unique and have very different economic values, they cannot be exchanged . That is, we cannot exchange a Basquiat painting for a Goya painting just because they are paintings. Each of them has a specific value that does not allow this type of business.
It is important to understand the difference between fungible and non-fungible assets because NFTs fall into the latter realm . NFTs are what are known as non-fungible tokens, with tokens being units of value associated with a digital business model such as cryptocurrencies.
However, unlike cryptocurrencies, an NFT cannot be broken up to divide its value . It is a non-fungible asset with a unique and non-transferable value. Returning to a very tangible example, in the same way that we cannot break a physical sculpture into pieces and sell it piece by piece, we cannot do that with an NFT either.