Cryptocurrencies have a lot of uses as an investment, as a currency for payments, as a store of value, as well as others. Like any investment, it’s vital to know what you’re talking about and more importantly, what the person trying to sell you something is really saying. And like any other field of finance, industry, art or basically every human endeavor, it has its own lingo, acronyms and definitions — and especially in matters of law and finance, definitions matter.
Read more: NFT Series: What Are NFTs and Why Are They Crypto’s Newest ‘Next Big Thing?’
In this series of articles, we’re going to create a number of glossaries for various parts of the crypto industry, which we’ll combine into a larger reference tool. Today, we’re talking about one of the most hyped part of the crypto world: The NFT, or nonfungible token.
See also: DeFi Series: How to Buy an NFT in 19 Easy Steps
The tokens — no two are alike — can hold any type of media, including art, audio, video and documents. That means you can put an album on an NFT, but also a bond or a deed. They also provide proof of ownership and the provenance of the NFT itself.
See also: NFT Series: Can NFTs Be Securities? The SEC Says Yes
They have been embraced by marketers even more than the metaverse. That’s because NFTs exist, whereas metaverses are largely in the early stages of construction, at best.
Read more: What do You Get When You Buy an NFT? Less Than You Think
Another thing worth noting is that the media on an NFT is not necessarily — in fact, not generally — stored on the cryptocurrency token itself — meaning the artwork, music, video, whatever hasn’t been written onto the immutable blockchain, as that can be hugely expensive. That means it is stored somewhere else on the internet — which means if the wrong server or cloud goes down, the NFT could be destroyed.
PYMNTS Cryptocurrency Glossary: The Basics
PYMNTS Cryptocurrency Glossary: Regulations, Legal and Crime
