What is NFT?

In simple terms, an NFT(Non-Fungible Token) is a token that has a unique identifier and has additional parameters that let you save certain information on it. The additional information can be texts, images, audio, or video files.

Fungible Tokens

BTC/ETH

Fungible tokens are interchangeable

Fungible tokens are uniform and can be traded on exchanges(coinbase) and they are also similar to stocks

Fungible tokens are divisible and can be divided into fractional amounts. For example, 1 BTC is divisible up to 0.00000001 BTC, allowing for better liquidity for swapping your tokens.

Non Fungible Tokens

NFTs

They are non-interchangeable

They are unique- can be traded on marketplaces and they are also used in art pieces and intellectual property

Non-fungible tokens cannot be divided.

They are generally illiquid and are difficult to sell instantly.

That said, there are projects which allow NFTs to be fractionalized into smaller fungible pieces. This allows users the opportunity to own portions of an NFT instead of the whole piece, lowering the entry barrier for highly-priced NFTs and improving the liquidity of these NFTs.