NFTs or non-fungible tokens are changing the way we own and interact with digital items. Think about it, who wouldn’t want to hold property? Even if it isn’t physical? Many would–and it’s the desire of many, to hold prime real estate. Gamers can relate more to virtual ownership of property. Before smart contracts, ownership was very centralized and controlled.
But then Ethereum tore walls, innovation kicked in, gained traction and tokenization—fractional ownership of a physical asset, as we know it, was made possible. With that, the community became more innovative. And at the height of it all, we had CryptoKitties in early 2018.
Being popular—and relatable, these digital cats were special, fetched several thousand bucks in the open markets, existed in the digital ether of Ethereum, and were controlled by smart contracts. Each cat was unique, and the owner had full control. This was made possible because each cat was basically a Non-Fungible Token (NFT).
Buying land or real estate
The Sandbox is another dapp game making some serious moves and showing users the possibilities of digital ownership. After hosting two successful land presale events concluding with +1300 ETH selling more than 10,000 lands. They have announced the third land presale on March 31st.
Another popular dapp game offering users virtual real estate is Upland. Set within San Francisco, with more territories to be added soon. Upland allows players to buy, collect, sell and trade real estate in a virtual city. Think Monopoly on a grand scale. Users can build a portfolio and become virtual real estate tycoons. Buying property at a low cost and selling it when it becomes more desirable and pocketing real money in the process.
What are non-fungible tokens?
A fungible token can be exchanged for another where both bear the same characteristics with no discernible distinctions. ETH, TRX, BTC, and most coins/tokens are considered fungible.
An easily relatable real-world example of something fungible could be a one-dollar banknote. If you were to lend that note to someone. It wouldn’t matter if they didn’t return the exact same one.
The concept of a non-fungible token was first introduced through an Ethereum Improvement Proposal (EIP) by Dieter Shirley in 2017.
When something is non-fungible, although it may look identical to another item. It will have unique information or attributes that make it irreplaceable or impossible to swap.
One easy to understand real-world example of a nonfungible asset could be a bus ticket. They all look the same, but each one has a different name, destination, departure time and seat number. Exchanging your ticket with someone else could lead to some serious issues.
Today, despite the proliferation of smart contracts, most non-fungible tokens (NFTs) are built on the Ethereum protocol. However, this feature is possible in most smart contracting platforms where assets can be tokenized.
In Ethereum, NFTs are based on the ERC-721 standard, which was recently upgraded to ERC-1155. The standard deviates from the common ERC-20 standard used predominantly during initial coin offerings (ICOs).
Different, non-fungible token protocol implementations are more detailed. Metadata about the asset including special information about ownership that once validated allow provenance of an asset, a real game-changer that given how valuable it is, could prove useful in mass adoption.
This is possible because non-tech companies can easily incorporate NFTs in their operations without the need for their team to be proficient in programming.
True ownership
Every NFT token, even from the same emission, varies in properties and each is unique. Their value also varies and cannot be reproduced. If duplicated or in any way exchanged, its value is permanently lost.
Since NFT tokens operate from the blockchain, we can define them as unique, blockchain-managed digital items/assets that represent ownership.
Like every other standard though, the ERC-1155/ ERC-721 standard is manned by a smart contract, the heart of automation. From the lines of code, attributes, and functions are spelled and these must consequently be managed, owned, and traded. However, just to dispel doubt, different protocols have their standards.
The nature of blockchain also means these unique tokens are publicly accessible and verifiable, creating some digital scarcity but uniquely without the presence of a third party. As economics dictates, scarcity means demand and that’s where value is accrued.
Valuable assets
These valuable tokens are therefore assets that are scarce, bear unique properties, and like every other token can be stored in a wallet.
But their application can extend beyond fun collectibles. NFT implementation can secure valuables like degree certificates, medical records, KYC information, voting, copyright, and so much more.
NFTs are set to change the way we interact with digital assets. Recently, innovative blockchain platform – WAX, announced a partnership with the world’s longest-standing and largest producer of tradable cards – Topps.
Topps boasts franchises such as Star Wars, Major League Baseball, WWE and the Garbage Pail Kids. This partnership deal will see Topps make their vast licensing portfolio available to users of the WAX blockchain.
At DappRadar, the majority of tracked NFT tokens are operated from the Ethereum blockchain. EOS, Tron, and Loom are also hosting some. You can find these unique tokens under the “Collectibles” category.
