What is an NFT?

What does NFT mean?

NFT stands for "non fungible token". I'm sure you'll agree that the translation doesn't make the point very clear. So let's go through it word by word:

What is a 'token'?

A token is a digital asset authenticated by the blockchain. It is, of course, different from a physical asset (furniture, real estate, etc.) but also from an intangible asset (for example, an asset protected by intellectual property, a brand or a patent). This could be a unit of crypto-currency (bitcoin or other crypto-currencies, for example), or a digital work of art associated with a certificate of ownership.

What do "fungible" and "non-fungible" mean?

Something is said to be fungible when it can be replaced by something similar. A euro (or bitcoin), for example, is fungible. Conversely, something that is "non-fungible" is unique and cannot be replaced by another. A work of art is obviously "non-fungible": you can't replace a Picasso with a Van Gogh, even if they have the same "value"!

Once the notions of 'token' and 'fungible' have been clarified, it becomes easier to grasp the concept of NFT. It is a unique digital asset that cannot be replaced by another. Imagine a film, a digital photo or an audio file associated with an unfalsifiable certificate of authenticity: that is exactly an NFT. Its certificate makes it unique. Thanks to this same certificate, you can keep it, transfer it, sell it or rent it, just like a "traditional" asset.

What makes NFTs really unique?

Can we really say that NFTs (digital works of art, for example) are unique when it is so easy to duplicate image files? Does it really make sense to buy NFTs when all you need to do is copy and paste them?

The answer is simple: an NFT is much more than just a file. It is a file associated with a unique certificate of authenticity (with a dedicated number). You can certainly duplicate the file (audio, video, image) associated with your NFT, but not the NFT itself. In other words, if your NFT is a work of art (or a stamp), you will have the image of the work by duplicating the file on your computer, but you will not have the work itself. Ultimately, it's the same thing with a 'physical' work of art: buying one of the many copies of the Mona Lisa doesn't mean you own the work!

Another question arises: can an NFT be said to be unique if it looks exactly the same as another? Can an NFT be said to be unique even though it is part of a series of 100,000 NFTs that all look exactly the same? Here again, the answer is simple: if the NFTs have the same appearance, they are all numbered with a unique number. The parallel can be drawn with photo prints or lithographs. The image is indeed the same... but it's the number that makes the work unique. The first print is more valuable than the last.

What is the role of blockchain?

The blockchain is the system that secures the data linked to NFTs. As soon as it is created, the NFT is recorded in the blockchain. In NFT jargon, this stage is referred to as "minting" the NFT. The blockchain makes it possible to trace the life of the NFT, from its creation through all the stages of transactions (purchase-sale). Thanks to blockchain, it is impossible to copy an NFT and resell it with a false certificate: there is no place for counterfeiters in the world of blockchain.

How does blockchain work?

In practical terms, blockchain consists of a large network of interconnected computers. Unlike traditional networks, no server centralises the data, but hundreds or thousands of players share the data, encrypting and securing it. This transparent system allows everyone to check the information linked to the NFT. There are several blockchains for securing NFT data. The oldest is Ethereum for NFT. PhilaPoste has chosen to work with the French Tezos blockchain.

Figures and dates

2014: the first appearance of NFTs

The very first NFT was called Quantum, created by New York artist Kevin McCoy. It was the first work to be associated with an NFT certificate of ownership. At the time, the idea was to protect the rights of digital authors. The system was further developed in 2015, with the creation of the Ethereum blockchain.

December 2021: the NFT Merge sold for $91 million

Designed by the artist Pak, this NFT was not bought by a single owner but by almost 30,000 people, each of whom bought a piece. In total, the "jigsaw" consists of 266,445 pieces. This sales record beats that of the NFT designed by Beeple, sold by Christie's for over 69 million dollars a few months earlier. Both artists are renowned for their work, and Beeple has just been admitted to Turin's Museum of Contemporary Art.

November 2021: NFT stamps issued by Swiss Post sell for up to 500 euros each

In November 2021, Swiss Post will launch its first series of NFT stamps. Each NFT combines a physical stamp with a virtual work of art and a certificate of authenticity. The 175,000 stamps sold out in just a few hours. Shortly afterwards, bids for new and unopened stamps rose to 500 euros.

September 2023: Philaposte issues its first NFT stamp, priced at €8

Created by artist Faunesque, the NFTimbre combines a physical stamp and a virtual image. Philaposte wanted to make it accessible to as many people as possible, issuing 100,000 copies and selling it for 8 euros (the postage value of the stamp). Of course, the NFTimbre can be stamped "1st day"; a practice well known to our philatelists with a new rule: only stamps bought on the 1st day can claim to be physically stamped 1st day.