What are Non-Fungible Tokens (NFTs)?

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What are Non-Fungible Tokens (NFTs)? Blog Image


Google recently said it will allow developers to offer games on the Play Store where players can buy, sell and earn tokenized digital assets—like non fungible tokens.

About Non-Fungible Tokens (NFTs):


  • NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
  • They can represent digital or real-world items like artwork, photograph, song,  video, real estate, individuals' identities, property rights, and more.
  • Thus, NFTs are assets that have been tokenized via a blockchain. They are assigned unique identification codes and metadata that distinguish them from other tokens.
  • The term ‘non-fungible’ simply means that each token is different as opposed to a fungible currency such as money (a ten-rupee note can be exchanged for another and so on).
  • NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs—it all depends on the value the market and owners have placed on them. 
  • NFT transactions are recorded on blockchains, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain. 
  • NFTs became popular in 2021, when they were beginning to be seen by artists as a convenient way to monetise their work.


What is Blockchain Technology?

  • A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. 
  • Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
  • Decentralized blockchains are immutable, which means that the data entered is irreversible. 
  • This means if one block in one chain was changed, it would be immediately apparent it had been tampered with.


Q1) What are Cryptocurrencies?

A cryptocurrency is a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

Source: Google unveils NFT policy for Play Store to incorporate tokens into games