Non-fungible tokens (NFTs) are unique digital projects whose ownership is managed by blockchain. Such ownership records are applied in digital arts, collectibles, VR projects, encrypted domains, physical assets, etc.
Below is a comparison of replaceable, semi-replaceable, and irreplaceable assets.
Replaceable assets: Cash is an example. Each ¥10 note equals any other ¥10 notes in value, and can be equally split into ten ¥1 notes;
Semi-replaceable assets: Take tickets to tourist resorts for example. Every ticket to the same resort is identical in its value (though prices may vary during slow and peak seasons);
Irreplaceable assets: Examples include Leonardo Da Vinci's "Mona Lisa" or CryptoPunks, which are unique and indivisible;
Hallmarks and value of NFTs:
- Unique: Each NFT is unique, as no two NFTs with the identical Token ID can be generated on the same smart contract;
- Copyrighted: NFTs grant copyrights to their owners. For a copyrighted NFT work, all owners on blockchain enjoy full commercial rights to the image or asset;
- Rare: NFTs are scarce because they are unique and cannot be reproduced. In most cases, few artists or sellers will generate more than 1,000 NFTs for a piece of work. By purchasing an NFT, you'll be one of the few owners of this collectible and can resell it at your will.
- Collectible value: As time goes by, these NFT items or collectibles will continue to appreciate in value. You may make thousands of dollars from purchasing and reselling these NFTs. Many people do this every day and make a living by it.
- Downloadable: Only the incumbent NFT owner can unlock the attachment that comes with the NFT. For NFTs that include items like in-game assets, music, and PDF files, you will obtain access to that song, PDF document, and others upon buying the NFT.
- Immutable: No one can change the metadata of the token or delete the image or name of the token. This means NFTs will stay intact forever on the blockchain, which explains the huge value of collecting them.
- Eternal: NFTs are eternal. You will own the NFT you bought permanently as data on blockchain will stay there indefinitely. You may choose to resell it, like how you would do with any of your personal possessions.
- Resalable: You may resell and trade your NFTs at any time to make a fortune out of the deal. Today, many of the NFTs priced above $20,000 were initially purchased at merely thousands of dollars, bringing their buyers profits of more than $15,000 within a short period of time.