Lots of blockchain projects these days issue crypto collectibles, aka non fungible tokens, aka NFTs, aka digital assets that are unique and can be transferred between different users over a blockchain. So what exactly are they? Read on to find out everything you need to know about non fungible tokens!
Topics That We Covered
- The definition of a non fungible token
- Why NFT is trending?
- How NFT are created?
- The future of NFT?
The definition of a non fungible token
A non fungible token (NFT) is a blockchain-based representation of a digital or physical asset that is unique and can be transferred between parties. Think of it as an old-school baseball card, for example. There are millions of baseball cards in circulation—and, when we say baseball card, we mean something very specific: It’s not just any card from any set, but one that belonged to Mike Schmidt during his playing days with the Philadelphia Phillies.
Why NFT is trending?
Non-fungible tokens, or NFTs, are the newest trend in tokenization and represent a unique way of using digital assets. These items can be different than what we’re used to seeing – they can have multiple uses instead of just one singular purpose. For example, they might be utilized in games that offer more diverse options than what we typically see elsewhere. In some cases people believe that these items are only useful when it comes to blockchain gaming – but nowadays there are many different types of uses for them too.
How NFT are created?
Non-fungible tokens are built on top of other blockchains, which means they have their own set of rules. The ERC-721 standard specifies a way to build non-fungible Ethereum tokens (NFTs). The NFT protocol gives developers full control over how individual tokens look and behave. That’s why each one is unique and should not be confused with fungible tokens such as BTC or ETH. To build an NFT you need access to your own private blockchain in order to program new rules into it. Many companies that issue non-fungible tokens provide software platforms for creating them; often these apps can be accessed through user-friendly interfaces like wallets or exchanges. Because some companies use public blockchains like Bitcoin or Ethereum, individuals can sometimes send small amounts of non-fungible assets to each other without paying transaction fees – but sending large amounts may cost more than a few dollars in gas prices.
The future of NFT?
Non-fungible tokens, or NFTs for short, have been making news recently in the crypto space, with Ethereum now supporting ERC721 tokens. Non-fungible means that each token is different from every other token on a blockchain. The most famous example of non-fungibility is probably cryptocurrencies: all bitcoin are different from one another, and there’s no need to create multiple versions of each coin. It works differently than how fiat currencies work; imagine how much would it cost to produce two dollars! With fungible vs non-fungible tokens, fungibility means that you can substitute one asset for another without changing their value.