What is an NFT?
My definition of a Non-fungible Token (NFT)
TLDR; an NFT is a new kind of digital receipt.
The image below is shows a traditional receipt with information intended for humans, and information that only machines can understand and use.
An NFT could also be described as a machine-readable receipt (or a packing list, packing slip, packaging slip, delivery docket, shipping list, delivery list, bill of sale, bill of the parcel, manifest). It’s a machine-readable document that stores metadata on the blockchain, acknowledging that a person or entity has received money or property in payment following a sale or other transfer of goods or provision of a service. While traditional receipts are static records that can’t be changed, NFTs are automatically updated following a resale or other new transfer of goods or reprovision of a service.
- Every NFT must have a unique resource identifier (URI) that can be automatically interrogated by software so they can be verified/authenticated. Otherwise they’re useless.
- Some people talk about buying and selling NFTs, but you can’t buy an NFT any more than you can buy a receipt.
I believe an NFT could also be described as a “persistent machine-readable receipt on the blockchain, with fields that automatically update following a resale or other new transfer of goods or reprovision of a service.”
👉 The concept of an NFT is very similar to the concept of “Content Labels” — minus the blockchain. In 2004, I co-founded the standard for URL Classification & Content Labeling at the W3C — the standards body for the World Wide Web. In 2007, I wrote a blog post that explains what Content Labels are — machine-readable files that contain assertions about a resource or group of resources in the form of metadata.
More recently in 2010, Tim Berners-Lee used the same example as me during his keynote at the Gov 2.0 Expo 2010 conference — check out his video on YouTube because it’s short and concise “Open, Linked Data for a Global Community”.
Whenever someone buys something in Wubud, a new virtual country I’m helping to build in the metaverse, they will be issue a receipt in the form of an NFT (they won’t buy or sell NFTs).