What is an NFT when it's at Home?
I would like to tell you that NFT stands for Non-Functional Terminology. We have an entity that defines itself in terms of what it is not. Great. I swear, some people have a vested interest in keeping things complicated. If most people can't understand something, those who do understand it have an edge.
NFT stands for Non-Fungible Token. It is an entry on a digital ledger. The ledger is decentralized, meaning it is spread out over many user nodes in different locations, as opposed to being stored on a single server in one location. This decentralized ledger is called a blockchain.
The ledger is permanent and unchangeable. Transactions are recorded in 'blocks' of computer code which are linked together and time-stamped.
The code records the history of a digital asset, where it originated, who purchased it, any transference of ownership etc. The token can be assigned specific properties and uses in the digital world. For instance, the ledger could record ownership of a cryptocurrency like ETH. Or, it could record the minting of an asset into a token. This asset could be a card in a blockchain game such as Splinterlands, or a weapon, or a skin, in a game like Lost Relics. Or a resource (gold, lumber, corn or stone) in a game like League of Kingdoms. Or it could record title of ownership of a virtual property, in a game like Upland.me. Or it could be a graphic, a work of art. Some people are minting videos into NFTs. There are many potential uses.
Of the above examples, the first, cryptocurrency, is an example of a 'fungible' asset. The rest are examples of 'non-fungible' assets.
Cryptocurrency is 'fungible' because the assets are interchangeable with other iterations of the same asset. One bitcoin is exactly identical to the next bitcoin, in terms of usability. The same is true of the dollar bills in your wallet. One ten-dollar bill can be used just as well as any other to purchase goods or services. That's what defines these assets as 'fungible'.
The same is not true of the other digital assets listed above. A League of Kingdoms resource token cannot be exchanged for a Splinterlands card. You would have to sell your non-fungible asset for a fungible token (cryptocurrency) which could then potentially purchase your desired non-fungible asset. In practice the process is often quite convoluted. Blockchain games don't always reside on the same blockchain, and bridging between platforms can be costly and complicated. The industry is in its infancy, and there are still many usability issues to be ironed out. The Bitcoin Core blockchain does not natively support NFTs. There are projects in development which may extend Bitcoin's functionality by adding other 'layers' on top of Bitcoin Core. For the time being the major blockchains to support NFTs are Ethereum and Solana. There are others.
To sum up. Digital blockchain assets can be classified as 'fungible' or 'non-fungible'. They may both reside on the same blockchain, but they have different use cases. The fungible assets function as a medium of exchange and (hopefully) a store of value. Without the fungibility, they could not function as a medium of exchange. The non-fungible assets have quite specific uses, and can not be used as a medium of exchange. Put simply, you use the fungible assets to purchase the non-fungible assets.
Given time, the usability issues alluded to above will be resolved. Now is a great time to get into this field.
