NFT (Non-Fungible Token) - what is it in simple words?

NFT is a designation for non-fungible tokens.

The cryptocurrency sector is distinguished by its extensive base of specific terminology. Since 2021, it has been supplemented with such concepts as NFT (Non-Fungible Token) and the metaverse. Even though such technologies were introduced quite recently, the development, like the entire cryptocurrency system, has become very dynamic. Today, the NFT algorithm is successfully and effectively used to develop businesses for completely different purposes and to attract customers. According to forecasts, technology will cover an increasingly wide range of areas of activity.

Basic Concepts

NFTs are created using the same programming algorithm as cryptocurrencies. That is, tokens are cryptographic assets that are created using blockchain technology. They can be sold, bought, or exchanged in the same way.

NFT can be assigned to completely different assets, including pictures, texts, and any digital elements posted on different Internet resources. Roughly speaking, NFT is a certification method that is used in a decentralized system.

The main feature of an NFT asset is that, like any other data in the source code of a cryptocurrency system, it does not change. Data that is uploaded using NFT technology cannot be deleted or the file renamed. It is only possible to transfer it via an electronic wallet to another user, but the path in the system always remains. Thanks to this, any manipulation of assets is eliminated.

Key NFT Features and Benefits

To understand why this technology has become so popular, and the future is predicted for it, it is enough to understand the specifics. Main features of NFT tokens:

  • uniqueness - each element has its own attribute assigned in the information to the token; no two are alike;
  • indivisibility - NFT tokens cannot be divided into parts; small denominations, sales, and purchases are carried out only in full; they cannot be partially used.

If we talk about the advantages, then due to NFT, the ownership and authenticity of the asset can be easily confirmed. It is technically impossible to change this data. Thanks to this, a high level of protection against hacking and data theft to obtain benefits through fraudulent means is easily achieved.