What are Non-fungible tokens?
Imagine your favourite t-shirt being signed by your favourite celebrity. Now although your exact t-shirt may be found in the market. You will agree with me when I say that your shirt, your very favourite shirt, cannot be exchanged for another shirt of that kind. I can say that your t-shirt is non-fungible.
Your shirt is non-fungible because of the emotional signature you have on it and the signature of your favourite celebrity on it. Making it non-interchangeable and non-replicable.
With the understanding of my illustration above read the definition of Non-fungible tokens;
Image Source: upsplash
Defining NFTs(facts about NFTs)
Investopedia defines NFTs as, cryptographic assets on a blockchain with unique identification codes and metadata that distinguishes them from each other.
NFTs exist on a blockchain (a digital ledger) as data that can be sold or traded.
NFTs make the representation of real-world items, persons, identities, property rights and more a reality in our time. They represent these things by tokenizing these assets.
NFTs can exist as images, video, audio and even 3d art
NFTs are tokens such can only exist on an already existing blockchain. Nfts are tradeable because they are tokens or tokenized.
What are fungible tokens?
Knowing what non-fungible means now, the idea of what a fungible token or coin comes easily to mind. You can always exchange the shirt you just bought from the mall for another of that same shirt provided that they are the same. There are no special signatures or uniqueness between one bitcoin and another thus Bitcoin is fungible, the same as Ethereum, Solana and their likes.
Fungible tokens are equal with one another, they are also equal in value.
Examples of fungible tokens
Bitcoin
Solana
Hive
Bch
And every other cryptocurrency.
Examples of non-fungible tokens
Image source: upsplash
Crypto punks
Crypto kitties
Bored app yatch
NFTs and The Metaverse
Remember that NFTs are a unique class of digitized assets that are unique, non-interchangeable and indivisible. And that they aid in representing digital and physical assets.
Metaverse is a broad concept and has not fully taken a shape we can call definite. There are a lot of possibilities being projected as well as fantasies of what the Metaverse is.
Metaverse today can be defined as a virtual space where social interactions are possible using virtual reality and augmented reality. This world allows users to buy and sell items in the form of NFTs.
Imagine a 3D model of the internet. The idea of it is the far reach of the Metaverse. The most illustratable sample of the Metaverse can be seen in the gaming world with the likes of Fortnite. But Fortnite is what Google is to the internet. It provides data and is part of the internet but is not the internet. So is Fortnite to the Metaverse.
Three things are foundational to the rise of the Metaverse. They are; NFTs, virtual reality and augmented reality. This does not mean Metaverse is defined by only these technologies but, that they are part of the building block of the future we are yet to realize. One thing Metaverse is certain of has been one innovation that reinforced the belief timeline of NFTs.
NFTs and blockchain
NFTs exist on smart contracts on the blockchain they are created on. Ethereum is the first blockchain to realize Smart contracts in the crypto space. It’s no surprise that the first NFTs e.g. crypto punks are built on the Ethereum blockchain.
NFTs cannot exist without a blockchain. After the high tidal wave of crypto punks and other Ethereum blockchain.
Are Non-fungible tokens another bubble or innovation?
This question has frequently been asked since the inception of NFTs.
NFTs are a salient disruptive technology. And I believe with the advent of Metaverse, the applications of NFTs just became bullish. NFTs is a technology not just jpeg selling for millions. And the system that provides indivisibility, immutability and non-interchangeability will be a building block for the future of technology.
NFTs Applications (use case)
Non-fungible tokens(NFTs) have practical applications and theoretical ones as well. Only time can unfold the breath NFTs as a technology will reach.
Beyond the representation of digital assets and physical assets, there are real-life situational use cases of NFTs technology.
Here are a few practical applications of NFTs
Metaverse: as we explained in the section above. NFTs are a foundational building block in the future of the Metaverse. Every avatar on the Metaverse is an Nft, every virtual land or location will be represented by an NFT.
Gaming Industry: at this time, it's almost as if Nfts technology was built for gaming. It gels so well with gaming that Metaverse has gaming at its front use case. NFTs allow trading in the game easy. With the advent of Metaverse Avatars in gaming are made unique using NFTs and so on.
Real Estate: looking at virtual lands and digital real estate it is obvious how NFTs tech can be used to make physical real estate better. such as using this tech to provide proof of ownership and keep track of changes in property value over time using time-stamped NFTs
Authentication and tracking: NFTs technology can be used to authenticate assets and even track them. This is one major advantage Nft technology comes with. Because NFTs are immutable, indivisible and non-interchangeable. Nfts technology is a holy grail when applied to voting, artwork tracking and authentication, medical records and identity verification and intellectual properties and patents.
Tokenization of important documents and items: documents like birth certificates or Academic certificates can be represented in NFTs and cannot be forged. Ticketing for concerts and shows can be done using NFTs.
Now tell me, what do you know about NFTs?