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Introduction to digital property
A simple introduction to different forms of digital property.
Digital property refers to any type of digital asset that is stored on a blockchain. The most common forms of digital property includes fungible assets such as cryptocurrencies and non-fungible assets (NFTs) such as digital art or certificates.
A fungible token or cryptocurrency is a digital asset that is interchangeable with another asset of the same type and value. Each unit of a fungible token is identical to every other unit. Meaing that each token can be exchanged with another without any difference in value or functionality. For example, any given one dollar note is interchangeable for another one dollar note. Fungible tokens represent a digital form of asset that are similar to traditional currency.
A non-fungible token is a digital asset that represents ownership of a unique item or piece of content. Unlike fungible tokens, NFTs are not interchangeable with each other. Each NFT is one of a kind and cannot be replaced or replicated. NFTs can be used to represent a wide range of digital assets, including artwork, music, videos, certificates and much more.
When digital property is created, as either a fungible or non-fungible token, it is typically represented as a unique digital token on the blockchain. Anyone and everyone can create digital property given the technical knowledge.
Once a token is created, it is added to the blockchain via a transaction and becomes part of the network of digital assets that can be exchanged or traded. Each transaction involving the token is recorded on the blockchain, which ensures its authenticity and security.
One of the key benefits of creating digital property on a blockchain is that it provides a transparent and decentralized way to transfer ownership of digital property. Because the blockchain is a distributed ledger that is accessible to everyone on the network, there is no need for a centralized entity or third party to facilitate transactions.
Digital property in the forms of fungible or non-fungible tokens are stored as data in transactions on the blockchain. When digital property is created it is typically represented as a unique token that is stored on the blockchain. The token contains information about the property, referred to as the metadata, such as the owner, value and other relevant details.
As digital property is stored as data within transactions on the blockchain the digital property is secured by the security properties of the blockchain. Because the blockchain is a distributed ledger that is replicated on multiple computers across the network, there is no central point of failure or vulnerability. This means that the data stored on the blockchain is highly resistant to tampering, hacking, or other forms of unauthorized access.
Digital property in the context of blockchains provides a secure, transparent and decentralized way to create, own and transfer assets in the digital world.