NFT
An NFT is a token representing a single, unmistakable object, rather than an interchangeable unit like a euro.
Explained simply
"Fungible" means interchangeable: one euro is as good as any other euro. An NFT, by contrast, is unique: it stands for exactly one object, such as a digital artwork, a ticket with a seat number or a certificate.
The 2021 NFT hype around digital images gave the term a bad reputation. The technology behind it is useful regardless: wherever individual items need to be unambiguously assigned.
From the familiar world
A ten-euro note is fungible, a vehicle title is not: it belongs to exactly one car. An NFT is the digital vehicle title.
An example
A car manufacturer documents each vehicle's service history as an NFT. On resale the record travels with the car, tamper-proof and paperless.
Why it matters
NFTs are the tool for tokenising individual items: real estate, art, collectibles, certificates. For advisers the relevant distinction is between the speculative image market and use as a digital proof of ownership.
To pass on
„An NFT is a digital vehicle title: it belongs to exactly one object and proves who owns it.“
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