NFTs are rapidly becoming incredibly popular, both among users of crypto, as well as among people who do not otherwise own crypto. We have written this guide to explain to you the basics of what an NFT is. If you are looking for how to import NFT activity into Ledgible, click here.
NFT stands for Non-Fungible Token. That means that a token is unique and is not, or can not be, replicated. Cryptocurrency tokens, such as bitcoin, are Fungible, meaning there can be multiple bitcoin tokens with identical properties.
What makes an NFT is the token being backed by the blockchain and being able to track all transactions that have occurred with the token and who owns or owned the token at any point in time.
At this current point in time, the most popular use of NFTs is images and gifs as NFTs. However, technically anything that exists digitally can be turned into an NFT, such as videos, documents, web domains, and much more.
NFTs can sell for very high value, so many use them as a vehicle for investment. However, just like any investment (especially crypto) they can be very volatile and their value can decrease just as easily (maybe even easier) as it can go up. Many people also just enjoy collecting NFTs and having the status of being the sole owner of the image, gif, document, or other digital item.