What is a non-fungible token or NFT?

What is a non-fungible token or NFT?

Friends, today’s video is another list of token related videos. This is a current issue that many people ask me.

However, since this is a very broad and technical content, I will gradually explain how it works.

What does NFT mean?

From the English “non-fungible tokens” (NFTs), non-fungible tokens are tokens that are collectible, or which carry unique features. To better understand this, I will cite some real-world examples.

When something is fungus, it means it is easily exchanged for something identical. For example: When we lend someone a bill of R $ 50.00.

We don’t care if another R $ 50.00 bill is returned to us, right? It doesn’t make any difference.

This is entirely changed when we talk about something that is non-fungicidal, that is, that carries features or attributes that make it unique.

There are many examples of non-fungible objects. To remember an example, imagine something collectible: commemorative stamps, works of art, collectible sculptures, and so on.

Another interesting example of something without fungus can be a plane ticket. At first they seem to be identical but each has different characteristics such as: passenger name, place of origin, destination, departure time, number of seats etc.

OK Felipe, but where does the “token” come from?

In the digital world, the vast majority of crypto resources we know about are clearly fungi: bitcoin, etherium, lightcoin, and so on.

It was precisely using blockchain Etherium, a decentralized platform that runs smart deals, that non-fungible token standard was proposed by William Antriken, Dieter Shirley, Jacob Evans and Nastasia Shakespeare as an Etherium upgrade.

It was adopted on January 24, 2018, and gave birth to the most famous NFT platform, CryptoKitties, from the ERC-721 standard.

CryptoKitties is one of the first blockchain games in the world. Although CryptoKitties is not a digital currency, it provides the same security: each CryptoKitty is unique, 100% owned by you, it cannot be replicated, withdrawn or destroyed.

Another peculiarity of NFTs is that they are not divisible, as opposed to fungal tokens, such as Etherium itself, where we can trade a fraction of them.

But why are non-funky tokens valuable?

For the first time, we have a digital product with the following features:

1. Unique: Each NFT is unique and cannot be replaced, unlike ERC-20 tokens (the popular standard used for fungal tokens in the Ethereum blockchain);

2. Rare: NFTs can be limited in number in code so everyone knows how many there are and how to differentiate them;

3. Accessible: NFTs are universally available on the blockchain and therefore accessible to everyone;

4. Sustainable: NFTs exist as long as the blockchain is alive. Even if the manufacturers disappear, they will continue to exist in the blockchain.

Felipe, interesting this NFT guy. But tell me, is there an ongoing project for this?

Yes there is, and I will give an example of three projects in the categories of Arts and Collectibles, Games and 3D Animated Collectibles which include Virtual Reality and augmented reality.

Project with NFT

1. Rarible (RARI): User-generated digital collectibles and Rarible Marketplace allows users to easily create a digital collectible (without needing to know programming) and sell it in the market.

RARI combines some of the hottest DeFi trends of 2020, combining digital collectibles with “crop farming” and “liquidity mining” where users earn RARI governance tokens to use the platform.

Since July, the price of RARI tokens has risen 1,700%.

2. Terra Virtua (TVK): Ecosystem of 2D and 3D animated NFT Terra Virtua is an ecosystem of digital collection. Terra Virtua aims to provide its users with “a deeply sensitive experience” by presenting digital collectibles in the cross-platform world of virtual and augmented reality.

This is a similar concept to the augmented reality in Pokemon Go games with the real world.

3. Enjin (ENJ): Gaming In 2009, Enjin Network was launched, a community gaming platform that now has over 20 million users. In 2017, Engine Blockchain began creating a suite of products that allowed users to easily manage, explore, distribute and integrate crypto resources.

Instead of using an ERC-721 standard for NFT, Witek Radomski, co-founder and chief technology officer of the engine, developed the ERC-1155 standard that would define video game tokens in the Ethereum blockchain.

Engine tokens give power to more than one billion cryptocurrencies. The ERC-1155 is not just for gaming; Its application will benefit industries ranging from entertainment and finance to art design, artificial intelligence, real estate and much more.

Read more: Bitcoin broke BRL 100,000 and set a new record in reais

Also read: Whale Bitcoin will continue to keep bullish, the report reveals

Read more: Cryptocurrency Week: Altcoins could skyrocket, there is potential Bitcoin correction and recommended value cryptocurrency

Warning: The text presented in this column does not necessarily reflect the views of CriptoFácil.

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