Crypto Academy Season 2 Week 2 – Homework for @levycore: An Introduction to Non-Fungible Tokens

Before I explain the concept of NFTs, what is the meaning of "fungible" or "fungibility"? According to Frankenfield (2021), when an asset can be swapped with other assets of similar specifications or value, that asset or good is considered fungible (in other words, exchangeable or switchable).

To make it easier to understand, let us take money as an example of a fungible item: a friend of mine borrowed $1 from me - but then, when she returned it, she gave me two half-dollar coins instead. That should not matter since the value of those coins is still equal to a dollar.

Another example is cryptocurrency - it is fungible because it can be exchanged and traded in the market. When you trade a token for another, the form (or perhaps the token title) would be different but the value is retained. However, not all cryptocurrencies are considered fungible, some are unique that they cannot be swapped and that would be considered "non-fungible".

In conclusion, NFTs are unique unexchangeable assets. For example, think of the situation when you lose your identification card (ID), you cannot use another person's card because every card is unique for each identity; you cannot also exchange properties or ownerships such as houses. Also, creators today are selling their works as NFTs such as audio files, photographs, video clips, digital drawings, and much more.

- For creators:As I have mentioned before that creators sell their digital works as NFTs, allowing an opportunity for creators to monetize their pieces. Currently, NFTs in marketplaces can be bought and kept, or can be resold - allowing the buyer to gain more profit if the NFT would be sold for a greater price.

- Proof of original work: NFTs are considered as a certificate of authenticity in the digital world, they can be easily traced along with the selling/purchasing history and also the past owners of the NFT. Even if an NFT is passed onto many buyers, the original creator is still credited and also have gains from the transactions (Chojecki, 2021).

Although artists have earned great amounts of money through NFTs, people question the concept of it because they think that digital arts can easily be copied in the internet "What's the use of owning this?" - people can easily save an NFT and claim it as their own; people can save these files and use it without permission.. BUT.. even if people attempt to steal, copy, or change details of an NFT, it is easy to track the real owner of the asset and ownership is not something anyone can steal (Clark, 2021).

There are several creators that are publishing their digital artworks as NFT collectibles, one new and famous collection is the SpaceBudz that is launched in the blockchain of Cardano. Basically, this project includes 10,000 unique and adorable animal astronauts (which includes common to rare NFTs) and are being sold in a range of 25-100 ADA per character. SpaceBudz creators believe that anyone can create, share, and sell a digital collection to others (as said in their website)

People buy NFTs such as these SpaceBudz characters because they appreciate the cuteness and rarity of the animals; and they are fond of digital art collection.