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NFTs: much hyped, but how do they work?
NFTs have sometimes sold online for astronomical sums. But what exactly are these digital assets, and how are they traded?
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A visitor looks at an 'NFT digital artwork' at the Millon Belgique auction house, in Brussels. (AFP/Kenzo Tribouillard)
N
FTs have sometimes sold online for astronomical sums, with major companies now joining the craze as the tokens find their way into everything from the art market to video games.
But what exactly are these digital assets, and how are they traded?
What is an NFT?
NFT stands for Non-Fungible Token.
Something that is "fungible" can be exchanged with an equivalent item -- for example, a $5 bill with another $5 bill.
Cryptocurrencies, which use a digital public record of transactions called a blockchain, are fungible.
NFTs are digital items that can be bought and sold using this blockchain technology. But they are not fungible, making them a different type of asset.
