16-year-old Tanvi from India wondered what the "non-fungible token" was for, and what makes some of them so expensive?

In his article, published by the Australian website "theconversation", writer Francesc Rodriguez To said that non-fungible tokens are an effective technique for proving who is the owner of a digital product, which may be a song, photo, video, tweet, or even a digital plot. In an online game in a virtual world.

Recently, a digital plot of land in a virtual world was sold for $6,000.

Users were so eager to purchase it that they paid thousands of dollars in fees to complete the transaction.

The writer explained that non-fungible tokens are anything that is not replaceable and cannot be exchanged for something of similar value.

For example, real currencies are exchangeable things such as the British pound and other currencies.

In contrast, paintings are irreplaceable because they cannot be copied.

If you buy a painting that you can hang in your bedroom, it will be yours alone, which means that no one else will own the same painting.

Owning content in the digital world is very difficult because it can be copied with ease.

For example, if you find a picture you like online, you can right-click on it and save it to your computer and use it as wallpaper if you want.

If you buy a non-fungible token for a digital board from the person who made it, the history of your purchase will be kept in the Blockchain, a giant database that is almost impossible to change.

Once a blockchain keeps a record of a transaction, it stays there forever.

Everyone can see that you purchased that non-fungible code, which proves that you are the only owner of the digital code.

high value

But why would someone pay so much money to buy a non-redeemable token?

The writer mentioned that most non-fungible tokens have a low price and we only hear about them when there is a record sale.

The same applies to works of art, as we hear of someone paying millions to buy a painting by a famous artist like Picasso, while we have never heard of paintings that were sold for much less than that.

As with physical objects, the value of digital art depends on how much someone is willing to pay for it, and this can be due to many factors.

A person who buys a digital token may think that it is very beautiful or important, so he is happy to pay a lot of money for it.

The Mona Lisa was painted by the Renaissance artist Leonardo da Vinci, and it is one of the most famous pieces of art in the world, and it hangs in the Louvre Gallery in Paris, which millions of people go to see every year.

bubble

The writer pointed to another reason that may be behind the high price of non-fungible tokens, which is what economists call the bubble.

A bubble appears in the market when investors buy assets with a prime probability of selling them soon after at a higher price, and this pushes the price up.

Bubbles tend to pop up whenever a new technology comes out.

Many investors bet their money after hearing about the fantastic price of a new technology, or hearing about celebrities buying it.

They buy it without fully understanding its nature because they are attracted to the money they might earn by selling it in the future.

Some people think that's what happens with non-fungible tokens.

This does not mean that the non-fungible tokens are worthless, as the people who buy them do so only for profit and not because they are interested in owning an image.

Another reason why non-fungible tokens may be so expensive is their possible association with the Metaverse, a virtual world in which people are represented through avatars and a private digital space, such as the digital land that is sold in the “other side” virtual world. (Other Side).

In the future, non-fungible tokens could be displayed in this digital space in the same way we might attach a board in a real home.

It is also possible that some of them will be turned into unique avatars that the owner can use to interact in that world.