What Is a Crypto NFT?
Fungible is a property of a commodity which means the specific individual units are interchangeable. Examples of fungible commodities include dollars, bags of popcorn at the movies, or barrels of crude oil. In all of the above examples, one can be exchanged for the other and no one is claiming one dollar is worth more than another, for example.
Non-fungible would then mean that each item has a different value. Ever play the Parker Brothers game, Monopoly? Each set comes with cardboard property cards representing title to a rent-earning property. Mediterranean Avenue sells for $60 while Boardwalk sells for $400. If we’re playing the game, and I trade you my Mediterranean card for your Boardwalk card, I’m entitled to more rent or can resell my property for more Monopoly money. The cards would thus be non-fungible (one piece of cardboard is worth more than the other within an active game of Monopoly).
Token simply means something that is representational of something else and can be exchanged for it when desired. Coupons can be exchanged for goods, video game currency can be exchanged for in-game gear, etc.
Combine “non-fungible” and “token” and then apply those words within the cryptocurrency world and you get what the press is covering heavily.
Non-fungible tokens (NFTs) are cryptographic assets on ablockchainwith unique identification codes and metadata that distinguish them from each other. Unlikecryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions.
Whereas in Monopoly, your ownership of Boardwalk is established by your holding the card for it on your side of the board, in a blockchain, a reference to Boardwalk belonging to you would be saved across thousands of other computers as Boardwalk belonging to your Crypto Wallet at this time.
In other words, unlike a title to a piece of real property (a house), which is typically stored in a county/provincial courthouse, your claim to ownership is stored across many connected computers on the internet, none of which are backed by a government or more traditional, trusted source of ownership.
The thinking goes that since cryptocurrencies are not backed by any authority or government, the distribution of that claim and layers of encryption (that are a feature of cryptocurrencies) give everyone some assurance that ownership cannot be changed/moved simply by a hacker editing records.
So as an artist or art collector, you may “mint” or pay a “gas tax” to create a new NFT that points at a URL of your choosing. When NFTs are used in reference to art, they’re typically pointing at JPG such as one of the 10,000 images in the Bored Ape Yacht Club.
To Mint simply means to create an NFT on the blockchain of your choosing. You decide what URL it points at. Once minted, copies of the record as distributed across the chain by the miners.
Gas Tax is the fee you pay so your NFT transaction can be executed, which is accomplished on the network by miners (members of the network who are running the blockchain code.
Miners are the network participants who sell their computing power to the blockchain to maintain it and further encrypt transactions. Their cost is maintaining their computer hardware and the electricity required to run their mining rigs.
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