The arrival of blockchain technology and its application to provenance and authenticity changed things. As an unalterable, public, and secure database, the blockchain made it possible to assign uniqueness to digital assets.
Cryptocurrencies were the first use-case for this technology. By ensuring the uniqueness of each coin, blockchain technology prevented people from double-spending cryptocurrencies on the blockchain.
It didn’t take long for people to figure you could start representing other things as unique digital assets. However, the development of non-fungible tokens was what really brought this idea into mainstream consciousness.
Non-fungible tokens are unique digital assets that cannot be exchanged for another item of equal value. A five-dollar bill is fungible because you can swap it for another five-dollar bill. Cryptocurrencies are fungible; you can trade 1 BTC with your friend and get a 1 BTC in return, with no difference between the two.
A pair of limited-edition Nike Air Jordan sneakers are non-fungible. If you exchanged them for another pair in that series, you’d likely get a different-looking pair. The same goes for autographed novels, trading cards, and other rare items.
An NFT, whether it’s a picture of a cartoon ape, six-second video, tweet, artwork, song, or essay, is unique. Sure, it’s a file and anyone can make a copy, but a look through the metadata will confirm details of the NFT’s history.
For the first time in history, a digital asset could be considered rare as much as a physical item. This change provided fertile grounds for NFTs to emerge as status symbols in a world gone increasingly digital.
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