NFT or non-fungible token is a special type of cryptographic token that represents something unique and therefore is not mutually exchangeable. This contrasts with cryptocurrencies and many network or utility tokens that are fungible by nature. The four main characteristics of NFTs are that they are exclusive, undivided, transmissible and with the ability to demonstrate their inadequacy.
Concept of expendable and non-expendable property
For a better understanding of the concept of NFTs, we must address that there are expendable and non-expendable property in our legal system. Expendable property is one that can be exchanged, having a value based on its number, measure or weight. And non-expendable property is that which is not replaceable.
How NFT Works
NFTs are executed by means of blockchain or blockchain technology. It is the same as the technology of cryptocurrencies, which work through a network of transferred computers, with blocks or nodes linked and secured using cryptography. Each block joins a previous block, as well as a date and transaction data, and by design are resistant to data modification.
NFTs are given a kind of digital proof of validity, a series of metadata that will not be able to be changed. In this metadata its veracity is ensured, the starting value and all the achievements or transactions that have been made are saved, and also to its author.
Why do people buy NFTs?
If NFTs cannot be sold or bought easily, that is why it is believed that their value will increase over time, and then it could be sold for more money.
Therefore if you buy an NFT for 100,000 euros, in the future you could resell it for more money. It is a unique asset, which in theory should give it a greater value in the absence of another equal.