about NFTs
NFT itself comes from two keywords, namely "Non-fungible" which is a combination of "Fungibility" and "Token".
"Fungibility" refers to the price of exchanging an asset for a similar asset that of course has the same price. For example, you can exchange a 10,000 rupiah note for two 5,000 rupiah notes and the value remains the same. Meanwhile, "tokens" are digital assets that represent goods, services, or other forms of value.
Nft is also known as a digital asset that cannot be exchanged for anything similar, and every purchase of nft will be recorded on the blockchain and includes its creation and ownership.
Know that, unlike other digital currencies generated through blockchain technology, each NFT token is created with a unique value and follows the rules of its development. This is a key difference with conventional digital currencies. For example, the CryptoPunks project shows this uniqueness by only having 10,000 collections (sets), where each collection consists of more than 6,000 male cartoon characters and more than 3,000 female cartoon characters. In this project, the number of collections is also limited and only reaches ten thousand at any given time.
However, that's what makes NFTs so unique. The value of an item is not only contained in the object itself. This is the essence of how NFTs work. The price of an NFT item or token depends on agreements between enthusiasts or, in other contexts, agreements among collectors. This shows that the value of NFTs is not absolute, but is reflected in market dynamics and individual agreements between actors in the NFT ecosystem.
For example, stamps may be considered worthless by some people, but there are also those who are willing to pay a lot to get them. My understanding of NFTs is similar to this, where the value of a digital artwork is determined by a shared understanding of its value. It is true that calling NFTs “digital works of art” or even “digital Warhols” is not entirely accurate.