NFTs: Creating Digital Scarcity

If you have been following any tech news other than Elon trying to buy Twitter, then you have heard about NFTs. NFTs, non-fungible tokens, are all the rage in the crypto world. And, for a good reason! They allow you to create digital scarcity, something that is essential for any type of collectible.

What are NFTs?

Non-fungible tokens (or NFTs for short) are digital tokens with characteristics that uniquely identify them. They are not fungible: a token with identical characteristics can technically be replaced and assigned to another user of the same value without changing the token itself. Physical currency such as the US dollar is fungible, meaning we could swap dollars, and they would still hold the same value.

The value of an NFT is derived from its unique attributes rather than its potential to act as equity or currency in the future. The majority of NFTs do not have any inherent value beyond their digital scarcity, and as such, they do not retain any value while in circulation. Each token is special and can be assigned to a specific owner.

Some believe NFTs are the future of ownership and that it is hard to overstate the potential impact of non-fungible tokens on society. What say you?