While the world has had enough time to get acquainted with Bitcoin and other digital currencies, yet another newer type of digital asset has been slowly but steadily gaining attention.
However, if you have been following the crypto space for some time now, there is no doubt you have heard about the non-fungible tokens (NFTs). The non-fungible tokens take blockchain applications way beyond the usual digital currency usage – that is, to say, the possible use cases of this technology are almost endless.
Shortly, we’ll dive into what these non-fungible tokens are in detail: what makes them unique and how they can benefit the current society.
The Fungibility Concept:
While “fungibility” might sound a bit complex, it is really a very simple principle and in fact, all of us are already familiar with it. Fungibility refers to the concept of the exchangeability of a particular item/asset. For instance, a simple dollar bill is a perfect example; a $10 dollar bill in my pocket is worth exactly the same as the $10 dollar bill in your pocket (unless it is a fake). We could exchange these bills and both of us would neither win nor lose – because the value of these assets is the same and they are interchangeable.
Fungibility: Perfect Value Transfer?
For instance, if we were to exchange – perhaps, plane tickets, we would have completely different experiences based on the unique information present on those tickets. Thus, they are non-fungible, in other words, the kind of item is the same but the value is different because of the information unique to that item.
We can’t simply exchange plane tickets as one would take you to the neighboring city, and the other might be for the plane going halfway around the world.
This uniqueness, or non-fungibility is what makes NFTs so great. If we are to apply this concept to the cryptocurrency space, Bitcoin is a great example of a fungible token. BTC has a total supply for 21 million identical coins, which of course any user could exchange one Bitcoin for another and the value would be the same.
The Non-Fungibility Concept:
A non-fungible token (NFT) is a type of cryptographic token that represents a unique asset. NFTs are tokenized versions of digital or real-world assets. 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.
NFTs can be used by decentralized applications (DApps) to allow for the creation and ownership of unique digital items and collectibles. While NFTs can be traded in open marketplaces that connect buyers with sellers, it is worth noting that the value of each is unique.
The standardization of NFTs allows a higher degree of interoperability, meaning that unique assets can be transferred between applications with relative ease.
The Use Cases Of NFTs:
As mentioned before, applications of NFTs are virtually endless. As a matter of fact, this class of tokens can serve as a foundation for a new blockchain-led digital economy. In contrast to fungible tokens, NFTs are able to facilitate the process of data and assets digitization.
They could be used in many different fields, such as video games, digital identity, licensing, certificates, or fine art - and even allow fractional ownership of items.
Storing ownership and identification data on the blockchain would increase data integrity and privacy, while easy, trustless transfers and management of these assets could reduce friction in trade and the global economy.
However, if we were to look at the present uses of NFTs, there are lots of them which we would discuss below:
- NFTs: For Fine Art
At the moment, digital artists experience a lot of difficulties protecting their copyright. On the web, lots of people disregard the uniqueness and talent behind numerous creations and simply use the asset however they please. With the use of NFTs, digital artists can sell their creations and buyers can showcase them in a virtual space – in this case, the proof of ownership would be stored on the blockchain.
One of the examples of current projects like that is SuperRare – a blockchain project that is creating non-fungible tokens that enable digital artists to link an image or a GIF they’ve created to a token. This NFT represents ownership of the item and allows the creator to retain their copyrights.
- NFTs: For Virtual Assets
Another application of non-fungible tokens appears to be in the space of virtual assets. As an example, the sale of unique domain names is now gaining popularity with the help of NFTs. Just like that, The Ethereum Name Service is selling its “.ETH” domains as non- fungible tokens now, as does the Unstoppable Domains with its “.crypto domains”.
- NFTs: For Collectibles
The real fame came to NFTs with CryptoKitties in 2017, when some of the assets on that platform were sold for hundreds of thousands of USD. CryptoKitties is a video-game that allows users to breed and collect unique crypto cats. Each cat created on CryptoKitties platform is 100% unique and impossible to replicate. Creators were able to buy and sell cats within the community, create cryptocats’ collections, and earn rewards.
Moreover, crypto-collectibles are gaining a lot of traction in the online world – these days, anyone can purchase tokenized versions of their favorite sports stars or Hollywood actors. In addition to that, users are using NFTs to digitize traditional collectibles, such as coins, stamps, or baseball cards.
- NFTs: For Gaming
Just like with CryptoKitties, non-fungible tokens can be utilized for digital assets that need to have unique traits and be differentiated from each other. Another example of a non-fungible token is Sandbox’s LAND token. The Sandbox is a virtual world where players can build, own, and monetize their gaming experience via Ethereum blockchain.
In addition to all these features, NFTs in the gaming world allows players to easily transfer items even between games – which is largely prohibited in the off-crypto gaming space. For instance, players are not allowed to sell rare skins and weapons in Fortnite. NFTs create a great workaround for this issue.
THE NFTs COINS:
Below we profile three NFT projects from the following categories: Art & Collectibles, Gaming, and 3D animated collectibles that incorporate VR & AR.
- Rarible (RARI)
- Terra Virtua (TVK)
- Enjin (ENJ)
- RARIBLE (RARI) | Digital Collectibles And Marketplace:
Rarible enables users to easily create a digital collectible (no coding skills required) and sell it on their marketplace. RARI brings together some of the more interesting DeFi trends of 2020, with digital collectibles being combined with yield farming, and liquidity mining - with users rewarded in $RARI governance tokens for using the platform.
With a focus on user generated artwork, RARI enables intellectual property through the user creation of new artwork with a proof of provenance provided by the NFT. It also facilitates the sale and terms of sale on their marketplace, and at near zero costs.
RARIBLE (RARI) MARKET CAP:
Since its launch in November 2019, 36,336 artworks have been created on Rarible, with 26,574 sales and a total transacted of 9.63M. The total market cap is around $62,797,972 with a total circulating supply of about 855,330 RARI.
- TERRA VIRTUA (TVK) | A 2D & 3D Animated NFT Ecosystem
Terra Virtua is a digital collectible ecosystem that aims to provide its users with “a deeper sensory experience” by taking digital collectibles into a multiplatform VR and AR world. It is a similar concept to the Pokémon Go integration of AR gaming with the real world.
Whilst some digital collectibles are game-related, lending them an intrinsic value by using them in-game, most digital collectibles are simply static images; the digital equivalent of a trading card. This was one of the biggest challenges Terra Virtua chose to confront and is the reason behind the development of VR and AR integrations.
In addition to offering a marketplace for an interactive range of unique and licensed digital collectables, Terra Virtua is launching an entire ecosystem where owners can store, display, interact with and show off their collection via an app which allows the user to take a photo or video of themselves interacting with their collectible in a real-world environment.
THE TERRA VIRTUA (TVK) MARKET CAP:
The total market cap is around $106,362,771 with a maximum supply of about 1,200,000,000 TVK.
- ENJIN (ENJ) | Gaming
In 2009, Enjin launched the Enjin Network, a gaming community platform which now has over 20 million users. In 2017, Enjin began building a suite of blockchain products that enable users to easily manage, explore, distribute, and integrate blockchain assets.
Enjin’s tools enable game developers and studios to utilize tokenized digital assets as part of their acquisition, retention, engagement, and monetization strategies.
THE ENJIN (ENJ) MARKET CAP:
The total market cap is around $1,819,056,913 with a circulating supply of about 823,130,411 ENJ.
The Pros And Cons Of NFTs:
However, given below are the pros and cons of the NFTs:
- They could unlock new revenue streams in gaming, sports, the arts, and technology.
- Building decentralized apps for non‑fungible tokens can be tricky and time consuming.
- NFTs could introduce millions of people to cryptocurrencies for the very first time.
- Much more simplification is needed so NFTs are easy to use for people who know nothing about blockchain.
- They can transform our attitudes toward ownership - and make it possible to own a real-world asset that’s thousands of miles away.
SUMMARY ON THE NFTs MARKET:
Just like with any novice technology, the application and overall adoption of NFTs is not clear at the moment, but it is quite obvious that these tokens are causing some stir in the crypto community.
In addition, since non-fungible tokens provide the unique opportunity to digitize assets, possible applications of this technology cannot be limited.