What is an NFT ?
Non-fungible* tokens (NFT's) are tokens that we use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. No one can modify the record of ownership or copy/paste a new NFT into existence.
Fungibility according to Wikipedia is:
"In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part."
For example, gold is fungible since a specified amount of pure gold is equivalent to that same amount of pure gold, whether in the form of coins, ingots, or in other states. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies.
Fungibility refers only to the equivalence and indistinguishability of each unit of a commodity with other units of the same commodity, and not to the exchange of one commodity for another."
My own definition of an NFT:
NFT's are unique digital assets that allow creators to obtain royalities & profits on their original and scarce work by monetizing their ownership rights via blockchain technologies.
Characteristics of an NFT
I came up with my own model which I call the 5-0 Pizza Model of NFTs. Here it is:
Origin: Who is the creator(s)
Originality: Is it authentic? Meta data about provenance and history of the artwork
Ownership: Certification of ownership
Obtain Royalties & Profits: Make money of all transactions, incl. future transactions
Only One or a few works: Who is the owner ?