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With the crazy pace of the world these days you might not remember who Martin Shkreli is, but if you do it’s highly likely your memory is not a fond one. The difference is that Bitcoin and other cryptocurrencies are “fungible” and interchangeable, you can trade one Bitcoin for one Bitcoin.Īs the name suggests, NFTs are not fungible, they are one-off certificates or “tokens” of a particular thing that can theoretically be traded but not recreated - a bit like buying an original painting - and that’s partly led to its embrace in the worlds of art and investment, and their intersection in the real world they exist in. This provides security because if you’re a hacker who wanted to steal Bitcoin you would have to control enough of it to start with that altering a coin’s data to make you its owner wouldn’t be automatically corrected by the rest of the blockchain - and if you managed to get over that practically insurmountable hurdle, the Bitcoin you were able to steal would be rendered essentially worthless anyway because it would no longer be secure.Įthereum and Bitcoin (coins are illustrations, not real), both rely on blockchain technology, as do NFTs.Ĭryptocurrencies and NFTs rely on similar architectures and philosophies, and you need the former to buy the latter, creating a barrier for entry for newcomers, albeit one that doesn’t seem to be slowing down the recent rise of NFTs. In the context of Bitcoin, each new “coin” mined contains the history of previous Bitcoin, and they all talk to each other in a sense to ensure the database contains the correct information about who owns what coins and when they’ve been traded. Rather than storing data in tables in a database, the data fills up “blocks” which are then linked to the previous blocks

So what are NFTs and are they here to stay?Īn NFT is similar to cryptocurrencies like Bitcoin and Ethereum, in the sense that they rely on the same “digital ledger” known as blockchain.īlockchain works by creating an open and distributed record of transactions that’s nearly impossible to alter.

They’ve been heralded as the future of art and music and potentially the next best investment since Bitcoin, but they’re not without drawbacks.

Non-fungible tokens (NFTs) have been generating a lot of attention and headlines in the tech world in recent weeks, leaving many intrigued by their potential and many more scratching their heads wondering what exactly they are.