In economics, a fungible asset is something that has easily interchangeable units, such as money.
When it comes to money, you may exchange a £10 note for two £5 notes and have the same amount of money.
This is impossible if anything is non-fungible, which means it has unique qualities that prevent it from being interchanged with something else.
It might be a home or a one-of-a-kind picture, such as the Mona Lisa. You can photograph the artwork or purchase a print, but only one original painting will ever exist.
In the digital world, NFTs are “one-of-a-kind” assets that may be purchased and sold like any other piece of property, but have no physical form of their own.
Purchase of Wu-Tang Clan’s album
The digital tokens might be compared to ownership certificates for virtual or actual goods.
The lone copy of a one-of-a-kind record by the rap group Wu-Tang Clan was purchased for $4 million by a group of NFT collectors.
A non-fungible token (NFT) is a digital asset with a certificate of authenticity produced by blockchain technology, such as a painting, animation, piece of music, photo, or video.
Martin Shkreli, a disgraced executive condemned to jail for fraud, previously owned the record, which was sold at auction in July as part of an agreement to satisfy his debt to the US government.
PleasrDAO, a collection of New York NFT collectors, stated this week that it had obtained the lone copy of “Once Upon a Time in Shaolin.”
The gang spent $4 million for the two-disc, 31-track record, according to US media sources reposted by PleasrDAO’s Twitter account earlier this week.
They are well-known among NFT collectors for having bought digital works by Edward Snowden, a US whistleblower, and the Russian feminist punk band Pussy Riot.
They are now hoping to make “Once Upon a Time in Shaolin” available to the general audience.
“Although we are bound by the legal agreement underpinning this work of art and may not be able to duplicate and share the music digitally,” PleasrDAO said on its website, “we firmly believe there are ways to share this musical masterpiece with the world.”
What is the value of NFTs?
In principle, anybody may tokenize their work and sell it as an NFT, but recent stories about multi-million-dollar purchases have piqued attention.
An animated Gif of Nyan Cat, a 2011 meme featuring a flying pop-tart cat, sold for almost $500,000 (£365,000) on February 19.
Grimes sold some of her digital paintings for more than $6 million a few weeks later.
Art isn’t the only thing that is tokenized and sold. With bids reaching $2.5 million, Twitter CEO Jack Dorsey has sponsored an NFT of the first-ever tweet.
Christie’s auction of a digital artist Beeple’s NFT for $69 million (£50 million) set a new high for digital art.
Sorare, a French company that offers football trading cards in the form of NFTs, has raised $680 million (£498 million).
However, like with crypto-currencies, there are worries regarding the blockchain’s environmental effect.