NFT Explained: Unique Digital Signature

3 min readSep 30, 2021

What is an NFT

The name Non-fungible token (NFT) more or less means that it is one of a kind and cannot be duplicated or replaced by something else. Physical money is fungible — if you trade one dollar for another dollar you will end up having the same value in dollars. A one of a kind baseball card is non-fungible if you happen to trade it for a different card you would end up with something completely different.

NFT’s has taken off this year and is increasing in popularity. They are digital assets and they can take in the form of music, art, trading cards, memorabilia, and are being sold for millions of dollars.

How does it work?

The majority of NFT’s are part of the Ethereum blockchain. The Ethereum blockchain supports these NFT’s which store extra information that makes them function differently from let’s say a BTC coin. However, you should know that other blockchains can also implement NFT’s and some have already gone down that road.

Each NFT has a unique digital signature that makes the NFT one of a kind. This also makes it impossible to exchange for equal value or one another.

NFT include tangible and non-tangible items, including:

Collectibles
Designer sneakers
Art
Music
GIFs
Virtual avatars
Memorabilia
Game skins

Twitter founder Jack Dorsey also got in on the action and sold his very first ever tweet for a whopping $2.9 million.

You can also then derive that NFT’s are like digital collector items. For instance, instead of getting a Van Gogh painting, the customer will get a digital file instead. Furthermore, the owner will also enjoy exclusive ownership rights. This means that NFT’s can only have one owner at a time. Because NFT’S has a unique data signature it verifies ownership and the transfer of tokens between owners is a breeze.

Where can I get NFT’s

Here is a list of places where you can buy NFT’s:

Gamers will be delighted to know that NFT’s has expanded into the gaming sector. There are various in-game purchases that you can make across different video game platforms. The in-game assets can be bought and sold by players or even traded which adds even more fun to the dynamics of every game.

Should you buy NFT’S

As NFT’s are still in their infancy it may be worth investing a small amount and see what the future holds. Investing in NFT’s is largely a personal decision and different people will have different reasons behind wanting to invest in them.

You should, however, keep in mind that the value of NFT’s is based entirely on what someone else is willing to pay for it. Furthermore, typical stock price influencers like technical, fundamental, or economic indicators fall to the wayside as demand will drive the price of your NFT’s.

So choosing what NFT’s you invest in will be one of the hardest things to consider, but if a tweet can sell for millions then the possibilities are endless.