The NFT of that Nyan Cat was sold for nearly $1m equivalent in cryptocurrency. Ridiculous.
I’d honestly never heard the word “fungible” in my life until last year when I finally googled what NFT stands for. What a strange little combo of words - non-fungible token.
It doesn’t really help to explain the concept, right? Let me help you: gold is fungible. Diamonds are non-fungible.
I know, I know, that is super not helpful. I’ll try again.
The dictionary says that fungible means something that is “replaceable by another identical item; mutually interchangeable.”
So non-fungible means it’s totally unique and cannot be replaced by another item. (All gold is generally the same - you can change one gold bar for another and the value will remain constant…but diamonds have their own unique character and spec that affect the value).
And then “token” just refers to the fact that it’s a sort of “certificate”/proof of purchase.
So NFTs are used to authenticate the ownership of digital assets. It essentially is a token/proof that says “this person owns this digital asset” and the contract is stored on the blockchain (think of it as a digital ledger entry).
I think the Forbes definition is quite succinct:
An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos
So that’s my in-a-nutshell version. Do you need to know more than that? Probably not. But if you’re feeling nerdy and want to go deeper into how it works specifically, you can read this article by cleverer people.