Non-Fungible Tokens (NFTs)

A non-fungible token (NFT) is a type of digital asset with blockchain-managed ownership. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical assets, and more. They function as verifiable proofs of authenticity and ownership within a blockchain network. NFTs are not interchangeable with each other and introduce scarcity to the digital world.

Fungibility

Don't get overwhelmed by the idea of fungibility. Fungibility is a fancy way of describing trade between goods or assets of the same type. For example, all fiat currencies are fungible. To act as a medium of exchange, each individual unit must be interchangeable with any other equivalent individual unit. A one-dollar bill is interchangeable with any other genuine one-dollar bill.

Interoperability

The increasing demand of NFTs allows a higher degree of interoperability, meaning that digital assets can be easily transferred between marketplaces. This allows NFTs to have versatile functions. For example, a CryptoKitty NFT created on the Ethereum blockchain can be used to fight other CryptoKitties in another Ethereum application, Kotowars. NFTs can also have revenue sharing conditions so that the original artist is rewarded every time the NFT is sold in the secondary market. Through this, artists can have a steady revenue stream and are incentivized to continue creating more NFTs.

Final Words

NFTs have the potential to be one of the driving forces of a blockchain-powered digital economy. They could be used in many different industries, such as video games, digital identity, licensing, certificates, or fine art - and even allow fractional ownership of assets. We have only scratched the surface of the possible use cases for NFTs. What are you waiting for!

Learn how to create an account and mint your first NFT.

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