You’ve probably heard of cryptocurrency and NFTs, but do you know what blockchain is? Most people have an idea but aren’t too privy to the details. Most people may have maybe heard someone say blockchain, but few know the difference between fungible and non-fungible tokens.
If you don’t know about these things, don’t worry. This is what this article is for. However, you should remember that these are just the basics about blockchain technology. It continues to advance and evolve. Below are the differences between fungible and non-fungible tokens and an overall guide to blockchain.
What is Blockchain?
Blockchain is basically the technology that uses an immutable public ledger to prove ownership over digital assets. An immutable ledger is essentially a list of itemized transactions. Everything is kept on the ledger, and no one can change it. Each item, called blocks, is saved permanently. Even the errors and their corrections are found on the ledger. Using this ledger and smart contracts—software programs designed to turn on when something occurs—you can mint tokens into fungible or non-fungible assets.
Minting a Token
The process of minting a token is authenticating the asset into either a fungible or non-fungible digital mint. Fungible tokens are reproducible—replicable—while non-fungible tokens (NFTs) are completely unique. A lot of people want to learn how to mint an NFT to prove digital ownership or a file. These files can be anything—a photo, video, graphic, music album, or something else. When you mint a token in a ledger with a smart contract, you are authenticating it and are now able to prove that you are the owner of it whether it’s fungible or not.
Fungible vs. Non-Fungible
While both assets need to be minted, fungible tokens are not unique. The most common example of this is cryptocurrency. Cryptocurrencies are inherently replicable. Whether you are buying, selling, or trading cryptos, the price of it is based on the rarity of the coin and state of the market. On the other hand, non-fungible token assets are completely unique and therefore do not respond to the amount of assets left. NFTs can be worth millions or nothing. So much of it is perceived value, though. NFTs are a great way to prove ownership over a digital asset. Even if it’s just code or a manuscript for a book, NFTs are one of the most controversial and interesting new phenomena in finance.
Cryptocurrency is, of course, reproducible, but that doesn’t mean it’s not valuable. Plenty of people have made good money buying and selling crypto. Whether they get in early or sold quickly, crypto is obviously an effective way to make money if you know what you are doing.
Furthermore, cryptocurrency is decentralized and encrypted, meaning that it can be traded, purchases can be made, and sales can be closed without government interference, taxes, or regulation. Most governments aren’t happy about it. Yet, cryptocurrency continues to be a significant force in the modern economy. Some people dismiss it, but there are signs pointing to cryptocurrency becoming the currency of the future.
NFTs are not only a way to prove ownership over digital content and files, it’s also a way to sell digital artwork. The worth of NFTs varies a lot. An NFT could be worth nothing, but it could also be worth millions. NFTs are clearly inconsistent, but the technology that provides the ability to show that someone owns something digital is very useful to our modern society.
Whether you are interested in blockchain or not, there is no stopping the advancements of the future. Progress is not a straight line, but it’s always useful to tread softly. When you resist technology, you won’t understand it and therefore you won’t be able to help humanity go in the right direction.
Blockchain technology is one of the many technological advancements in recent years. It has spawned cryptocurrency and NFTs, but that’s not the end of it. There will likely be more ways that blockchain changes our world and proves ownership over digital assets. NFTs aren’t going anywhere anytime soon.