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NFT

What are NFT's?

By Just4s0mefun13 | Learning the Basics | 21 Mar 2022


NFT's are Non-fungible token.

Fungible is the ability to replace or be replaced by another identical item; mutually interchangeable.

Non-fungible tokens, or NFTs, are a new class of cryptographically unique 1s and 0s. Unlike fungible tokens, which are identical to one another and interchangeable with each other, each NFT is unique to its owner and has an explicit value. The most notable example of this is CryptoKitties - a game that allows users to adopt, collect, trade, and breed cute digital cats.

NFTs can be used for things like collecting items (like digital cats), creating limited edition art pieces (like digital paintings), or facilitating rewards programs for loyalty points (like airline miles). They can also act as a property in games like Cryptokitties. This blog will cover everything you need to know about non-fungible tokens.

 

What is a Non-Fungible Token?

A Non-Fungible Token is a new class of cryptographically unique 1s and 0s that are not interchangeable with one another. In contrast, fungible tokens are identical to one another and can be exchanged for each other.

NFTs are most notably used in games like Cryptokitties, a game where users can adopt, collect, trade, and breed cute digital cats. The best way to think about this is as tokens that are not just money-like (fungible), but have individualized value.

 

A Brief History of NFTs

Non-fungible tokens were first conceptualized in a paper from the 1980s called "A Proposal for Digital Coins." In 1991, DigiCash developed the idea with a new form of electronic money that could be used for transactions.

Fast forward to 2017, when cryptogamic company Axiom Zen released CryptoKitties on Thanksgiving Day. This game was one of the first games to use non-fungible tokens and went viral as soon as it was released.

 

What Possibilities Does the Future Hold for Non-Fungible Tokens?

So, what are the possibilities for NFTs? The answer is still unclear, but we can speculate.

Since their creation in 2017, there have been many new developments in the field of NFTs. Cryptokitties has had a major impact on the use and understanding of this technology. As of 2019, there are also games such as Gods Unchained and Etheremon that feature game items as non-fungible tokens.

There are also many possibilities for using NFTs with blockchain voting systems and storing records on them (like property deeds). There are even talks about using them to create digital identities for humans.

 

How are Non-Fungible Tokens Different From Fungible Tokens?

The first difference between NFTs and fungible tokens is that each NFT is unique to its owner. This means that, unlike fungible tokens, you can't swap one NFT for another one of the same type.

Secondly, unlike fungible tokens, each NFT has a specific value. This is because the token's value is derived from "something else" other than just being a token. These things include rarity, ownership history or attributes (like the type of material or color).

Lastly, fungible tokens are widely interchangeable because they're all identical in some way. Non-fungible tokens are not interchangeable with each other and are not identical to one another.

 

How Can They Do What Fungible Tokens Can't?

Fungible tokens are identical to one another, meaning that they can be exchanged with each other. Non-fungible tokens are unique and cannot be exchanged - they can only be transferred from one person to another.

The value of a NFT is derived from what it represents (e.g., the ownership of an item) and how difficult it is to reproduce (e.g., the uniqueness of a digital cat). Fungible tokens, on the other hand, derive their value primarily from their scarcity.

Non-fungible tokens have many potential applications in gaming, such as traditional collectibles like baseball cards and trading cards; in digital art, for creating limited edition pieces; and in loyalty programs for airlines miles or company points.

Aside from gaming purposes, non-fungible tokens can also represent property rights and ownership over assets like houses or cars. They could also enable new kinds of digital gifting mechanisms where someone might give you a NFT for your birthday instead of a physical present.

 

Conclusion

As the name suggests, Non-Fungible Tokens are tokens that can’t be substituted for one another. If a person or company wants to sell their tokenized assets, they must be able to prove that they are the original owner of the token. And because each token has a unique value, buyers have a better chance of being satisfied with their purchase.

Non-Fungible Tokens are an exciting new technology that has the potential to change how we buy and sell in the digital marketplace.

In conclusion, Non-Fungible Tokens are an innovative and exciting new technology that has the potential to change how we buy and sell in the digital marketplace.

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Just4s0mefun13
Just4s0mefun13

9-12 Educator looking to learn and share my knowledge with the younger generation.


Learning the Basics
Learning the Basics

Learning the basics of crypto and NFT. Trying to help you understand what everything is so you can make smart, educated decisions.

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