What NFTs are is the question on everyone’s mind in the blockchain community today. For those who have been paying attention to the ICO space, you know that these nifty little tokens have taken off in popularity in recent months. With the success of Crypto kitties and many others, NFTs are sure to become an even bigger topic of conversation as we move into 2019 and beyond. What precisely are Non-Fungible Tokens (NFTs), and why are they important? Your responses are down below!
When something is fungible, it is equal to or interchangeable with another object. However, when two or more things are unequal and cannot be interchanged, we call them non-fungible. Both fungible and non-fungible items can exist within a blockchain network, but tokens that do not fall under fungibility can be used for different purposes. This makes them unique from one another.
, Unlike their fungible counterparts, non-fungible tokens do not function as a kind of universal money. They cannot be exchanged for other currencies at a 1:1 ratio. They will not distribute dividends as a conventional stock would. However, if there is enough demand, they will give you ownership of a certain object and allow you to trade it on secondary markets. For example, let’s say your dog has a rare disease that causes his ears to fall off. Anyone who possesses an ERC721 token representing your dog and its condition will now be a part owner of your dog.
In reality, there are no restrictions on who can use non-fungible tokens (NFTs). In fact, some of these tokens have become immensely popular in a short time. We built an interactive virtual yacht at the Bored Ape Yacht Club to test our token the Ethereum network. Users now often transact with non-fungible tokens thanks to this fantastic community experience! Purchasing non-fungible tokens is comparable to purchasing Bitcoin or Ethereum, two other cryptocurrencies. If you already own cryptocurrency, then you’re already halfway there! Otherwise, purchasing other cryptocurrencies is as simple as visiting a reputable exchange site such as Coinbase or GDAX. You just deposit your cryptocurrency into your wallet using its unique address after purchasing it using USD, EUR, GBP, or any other traditional currency.
Non-fungible tokens have recently risen to prominence as one of blockchain technology’s most novel innovations, but there are still many who do not quite grasp what they are or how they work. Non-fungible tokens (NFTs), in a nutshell, provide you with a mechanism to represent and possess distinctive digital assets in a decentralized network. They may have value due to scarcity or just because someone else finds them appealing. For example, in video games such as Crypto Kitties, players buy and sell these virtual cats with real money-and it’s all made possible through NFTs. Some experts even think that NFTs, which offer a new kind of digital property ownership that is more equal than conventional intellectual property regulations, might help revolutionize our society.