What are non-fungible tokens and why are people putting so much value in them?

Description

Non-fungible tokens, also known as NFTs, are the latest trend linked to blockchain technology.

NFTs allow people to purchase authenticated digital items like digital artworks, memes or even the first tweet by Twitter CEO Jack Dorsey, which sold for more than $3million just a few days ago.

So why would someone spend millions of dollars buying something everyone with an internet connection can access?

Fungible means exchangeable. A movie ticket is fungible… you can give it to anyone else to use.

A typical plane ticket, on the other hand, is non-fungible. You can't give it to a random person waiting at the airport after you've decided not to jump on your plane.

So NFTs are unique collectible tokens that are permanently tied to, for instance, digital artworks and music. They cannot be separated; the token is the art.

Though NFTs have been around for years, recently the market exploded.

Denise Thwaites is an Assistant Professor in Digital Art and Humanities at the University of Canberra and she explains the concept to ABC NewsRadio’s Thomas Oriti.