In the past several years, tokens have become an integral part of the blockchain community. What was once deemed as a scam has quickly become the most popular method of crowdfunding in the world today, with billions of dollars being raised through ICOs each year. That’s why, if you want to launch your own cryptocurrency and raise money through an ICO, you need to create non-fungible tokens, or NFTs for short. However, there are quite a few reasons why you should consider adding NFTs to your crypto project. Here are just some of them!
What is a non-fungible token (NFT)?
A non-fungible token (NFT) is a type of cryptocurrency whose value is based on its uniqueness. NFTs are different from fungible tokens, like bitcoin and ether, in that they each have their own underlying blockchain that cannot be duplicated. This makes them unique or non-fungible compared to other types of cryptocurrencies, which means it would be hard to replace one crypto with another without affecting their value.
How does an NFT work?
One of ERC721’s key features is its ability to create non-fungible tokens, each of which can hold unique information. Unlike bitcoin, in which tokens are divisible (meaning you can own half a coin), ERC721 tokens are indivisible. So if you’re trading an NFT for something else using smart contracts, these rules must be programmed into your token. You can only trade it for one thing—not two or three or four things.
What can you use non-fungibles tokens for?
If you can’t swap one thing for another, then that ‘thing’ is called non-fungible. Collectibles like baseball cards and Beanie Babies are non-fungible tokens (NFTs), because you can’t replace a Babe Ruth rookie card with another without losing something of value. With NFTs, only one token exists to represent something in digital form.
Best non-fungible token examples
CryptoKitties and RareBits are two great examples of non-fungible tokens. The popularity of CryptoKitties has been surging in recent months, helping to push Ethereum’s market cap to new highs. With all due respect to Cryptokitties, though, we’re all holding out for RareBits. NFTs provide a rare opportunity for artists and collectors to interact directly with each other on a blockchain platform. This isn’t just cryptocurrency—this is art!
