What is a Non-Fungible Token (NFT)?

NFT is a type of token that is distinct from each other and cannot be interchanged. In certain
ways, this attribute makes it distinct and attractive. It is a virtual token made by cryptography,
to verifiably prove the validity and ownership of an object.
A non-fungible token (NFT) is a type of cryptographic token that refers to a specific object
on a blockchain. This can either be completely digital assets or real-world assets with
tokenized versions. As NFTs are not identical to each other, they may act within the digital
domain as evidence of authenticity and ownership.

Fungible Vs Non-Fungible Tokens

There are some major differences between Fungible and Non-Fungible tokens. These can be
listed as below:
1) Interchangeable: The Fungible tokens can be exchanged to the other token of the same
type whereas the Non-Fungible tokens cannot be replaced.
2) Uniform: All the Fungible tokens are identical in specification. However, each NonFungible token is unique and different.
3) Divisible: The Fungible tokens are divisible into smaller units whereas Non-Fungible
tokens cannot be divided.
4) ERC standard: The Fungible tokens are ERC-20 standard whereas the Non-Fungible
tokens are ERC-721 standard.

How are Non-Fungible Tokens used?

NFTs to issue specific digital objects and cryptocollectibles. Either a collectible object, an investment product, or anything else can be these
tokens. As many online games have already had their own economies, it makes it possible to
use blockchain to tokenize gaming properties.
In reality, using NFTs could theoretically solve or reduce the popular inflation problem that
many games have. Although virtual worlds are already thriving, the tokenization of realworld assets is another exciting use of NFTs.
These NFTs can represent fractions of assets in the real world that can be stored and
exchanged on a blockchain as tokens. Digital identity is also a market that can take advantage
of the tools of NFTs. Storing blockchain identity and ownership data will improve the
privacy and integrity of data for many individuals around the world.