What is an NFT?
A non-fungible token (NFT) is a digital certificate of ownership built on blockchain technology, that contains the provenance, the history, and all activities surrounding a digital asset. It is on the blockchain - meaning the activities can be viewed by the public and it is immutable - it cannot be forged.
Non-Fungible? What does that mean?
Fungibility simply refers to assets that are completely interchangeable. If I lend you a dollar bill and you pay me back later with a different dollar bill, it does not matter. Both bills have the same value. A non-fungible asset refers to an item that is not interchangeable. For example, a plane ticket. All plane tickets have different names, destinations, etc. which means that each one is completely unique.
How does this relate to the digital world?
An NFT is a digital collectible. Digital collectibles have existed for a while, but their full potential had not been unlocked until the emergence of NFTs. This is because NFTs incorporate blockchain technology, which gives them a myriad of benefits over traditional digital collectibles.