You’ve heard about them in the media, but what are they, and what can you do with them?
Treat your non-fungible token as if it is another layer of the internet. It’s not physical (it’s digital), so it’s not even real, you don’t own it, but rather is something that exists and can be used on a decentralized network. There are different types of NFTs:
Non Fungible Cards:
These have a unique ID on each card and use cryptographically signed codes (credentials). When the code is validated by a computer, the code becomes a permanent traceable record. This can be used for tracking the owner of an item. The most popular form of non fungible token used for this purpose is CryptoKitties.
Non Fungible Coins:
For Ethereum and other common blockchains, non fungible coins must come from one account; each user creates their own wallet. One address holds all their coins and keeps track of them. Users can then trade into others’ wallets if someone else does. Some popular crypto coins such as Litecoin and Binance coin are made up of non fungible tokens and are therefore “non fungible-type coins,” which are not interchangeable with Bitcoin or ETH. The main advantage of NFTs and non fungible assets is their permanence. Because NFTs cannot be altered or changed, users can continue using any cryptocurrency on Ethereum once it is released. Another important plus is that because these coins aren’t physically identical to BTC or ETH, only their ownership changes; after the transfer of ownership, both entities share similar amounts.
Non-Fungible Token Marketplace:
A marketplace where everyone can buy, sell, modify, and exchange non-fungible tokens. No single entity controls NFTs, although certain networks and artists use them exclusively. Examples include MetaMask, OpenSea and Uniswap. Anyone can write new tokens that will become tradable on these exchanges, giving more flexibility to traders. With all this information, there is still need to be a trusted intermediary, like Coinbase, Kraken or a third party like Amazon Web Services. All exchanges are free for public access but do charge commissions if you want to use certain services.
What kind of use cases make best uses for NFTs?
NFTs can act as security tokens for games and apps. An example would be a digital poster for a game being sold through auction. If an artist could create a digital version of their work by putting a photo of it on NFT marketplaces, the price will increase until the highest bidder wins. Similarly, digital posters for gambling websites are sold when a lot of players play a game. But how much should a blockchain company pay if 1 million digital posts are sold at $50? Or how might social media companies decide who gets paid when their followers go viral? To find out, check out our previous article on gaming NFTs.NFT artwork for Gentian Impact’s first batch of artworks.
What kinds of digital items can I use for my digital store? What does blockchain technology mean for them?
The answer to all those questions depends on the type of trading platform you’re planning to run on. Most users of traditional platforms will only see digital goods on their screens, leaving them unaware of anything else within the app or website. On some platforms, this may even hinder usability. For example, if we sell t-shirts, people will never know they are actually shirtless even though they appear to have worn those t-shirts in every picture they post. It’s called visual confirmation bias and, although its existence is well documented, it limits its usability, especially when looking at images. However, with NFTs and the ability to display multiple versions of the same thing, things can change their appearance and the digital asset can be viewed just like the original.
For a better understanding of the nature of NFTs and why it might be useful for your business, read this blog post. We’ll try our best to cover everything in a way that makes sense. Thanks for reading! 😉
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