NFT series

What is Non-Fungible Token (NFT)?




NFT is the abbreviation for Non-Fungible Token. It is a non-interchangeable unit of data stored on a blockchain as a digital ledger to verify the ownership and authenticity of physical and digital assets.

To understand NFT, we need first to understand the definition of fungibility. Let draw reference to the physical world for better understanding.


Fungible Assets

Fungible assets can be exchanged 1 to 1 with another item of the same classification/description, and currency is a perfect example.

Fungible assets can also be added or divided without changing the fundamental nature of the item. For example, a dollar can be divided, and it is any combination of coins that represent the same value.

Slight physical differences between fungible assets have no real impact on their perceived or the agreed value. For example:

  • A serial number on a banknote does not change the note’s face value.
  • A new crisp $50 banknote will purchase just as much in a shop as one that’s crumpled, tattered, and old banknote.

Ultimately, in the case of fungible assets, each asset is created equal.


Non-Fungible Assets

Assets that are not directly interchangeable or replaceable are known as non-fungible and characterised by:

  • Unique, Verifiable Identity
  • Provable Scarcity
  • Indivisible

In many ways, identity is tied closely to non-fungibility, be it the identity of the asset itself, its owner, or its creator. When things are non-fungible, each has its own unique identity. The differences in appearance, rarity, utility and many other properties directly affect its identity and, in turn, its value. For example:

  • A pair of Adidas Predators worn by Lionel Messi of FC Barcelona have more appeal than a pair worn by me.
  • A highly skilled forged copy of Mona Lisa holds a different value despite the shared dimensions, subject, and materials.
After understanding fungibility, Let’s move to the physical world and draw its references. For example, when we buy a property, a title deed is given to us to prove the property’s ownership. This title deed prevents anyone from claiming property ownership and its value. This paper-based certification is the simplified representation of NFT in the digital world.

Of course, NFT features extend more than just a digital certification that evaluates an asset’s authenticity. The 3 Main features that NFT provides:



Each NFT has a distinct attribute, often recorded in the token information. NFTs have different personalities, and no two NFTs are alike. An original image.jpg file, on the other hand, is identical to its duplicate, a.jpg file.


The information stored in NFT is immutable as it is generated from blockchain technology. Therefore, these tokens guarantee proof of ownership and the history of the asset.

Fraud Proof

NFT is created/minted on the blockchain…Need I explain more?

An NFT provides a solution essentially anywhere that requires uniqueness or identity plays an important role. Anywhere from art, gaming items, commemorative collectibles, digital rewards, or anything in between. Because NFT stores information that directly affects the fungible assets’ identity, it effectively brings real-world value into the digital space.

In the next part of our NFT series, we will look at “How does NFT work?”

Get Updated

If you find this series interesting and want to get notified. Click here to subscribe to a monthly newsletter of all the articles we publish on that month.



our newsletter

Want to get the latest updates on Blockchain and NFT? Subscribe to our newsletter and receive the latest news in your mailbox.

We respect your privacy

Follow us