NFTs Explained: A Beginner’s Guide
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What is NFT?
Does it simply consist of a JPEG or GIF on the internet? Unlike fungible tokens, non-fungible tokens have unique identities and metadata to distinguish them from one another.
It can be an image, gif, video, audio, or any digital item, stored on a Blockchain.
But what do I mean by non-fungible?
Anything that can be exchanged with an equivalent item is called fungible.
But, NFTs are unique tokens that can’t be split or exactly changed by another NFT of the same type!
For example, You can change a dollar bill with another dollar bill or four quarters, and it’ll have the same worth.
But you won’t exchange your Passport with another one, even if the cost to get one printed is exactly the same. It’s because there’s no other Passport like yours.
what’s the use of these tokens
NFTs are digital assets that hold metadata. The metadata marks the ownership and this can be used for preferential rights.
It can be used to digitally represent physical assets like artwork, give exclusive membership rights, etc.
It is not possible to divide non-fungible tokens in the same way you cannot send someone a part of a concert ticket, since a part of a concert ticket wouldn’t be worth anything and could not be redeemed.
However, some investors have been experimenting with the concept of fractionalized NFTs in recent months, despite the fact that they remain in a legal gray area and can be construed as securities.
We can use NFTs to buy, sell, trade, and collect all kinds of things—from stamps to sneakers to vintage arcade games.
They’re also super fun! You can use them to represent your favorite things in the world, like Pokémon cards or Beanie Babies.
CryptoKitties are among the first non-fungible tokens. Every blockchain-based digital kitten is unique; if you send someone one CryptoKitty and receive another, it will be quite different from the one you sent. Collecting different digital kittens is the point of the game.
The unique information of a non-fungible token, like a CryptoKitty, is stored in its smart contract and immutably recorded on that token’s blockchain. CryptoKitties were originally launched as ERC-721 tokens on the Ethereum blockchain, but have since migrated to their own blockchain, Flow, to be easier for crypto newcomers to access.
NFTs can also act as a gateway to DApps, prime communities, and open-source projects.
More on the NFT ecosystem, DApps, and crypto in the upcoming blogs!
Next blog: “If Blockchain has such astounding and liberating use cases, why there’s a resistance?