A non-fungible token, also known as an NFT, is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens that are fungible in nature. Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms.
NFTs are used in several specific applications that require unique digital items like rare crypto art, crypto-collectibles and crypto-gaming. The first use case of gaming related NFTs have been crypto-collectible trading card games. Projects like Age of Chains and Rare Pepes have been using the Counterparty protocol to issue Bitcoin based blockchain trading cards as NFTs as early as 2016Art was an early use case for blockchain. NFTs prove authenticity and ownership of digital art. The launch of CryptoPunks In June 2017 paved the way for "rare" art on the Ethereum Blockchain.
DADA.art built from the CryptoPunks model and launched the first marketplace for rare digital art in Oct 2017. Later, popular blockchain games like CryptoKitties made use of non-fungible tokens on the Ethereum blockchain. NFTs are used to represent in-game assets, and are controlled by the user, instead of the game developer.
This lets the assets be traded on third-party marketplaces without permission from the game developer. Marketplaces for rare art include Rarible,Super Rare, Known Origin and Opensea. Specific token standards have been created to support the use of a blockchain in gaming. These include the ERC-721 standard of CryptoKitties, and the more recent ERC-1155 standard. We will make a more in-depth video about them in the future.
Non-fungible tokens first became popular when CryptoKitties went viral in December 2017 and subsequently raised $12.5 million dollars. Gamedex, a collectible cards game platform made possible by NFTs, raised $800,000 dollars in their seed round. Decentraland, a blockchain-based virtual world, raised $26 million dollars in an initial coin offering,and had a $20 million dollars internal economy as of September 2018.
The potential in NFT’s is clear with major companies like Nike holding patents for its blockchain-based NFT-sneakers called ‘CryptoKicks’. And the overall NFT marketplace valued at $100 million dollars as of October 2020. We leave links to more research and a link to our Digital Marketplace powered by Rarible. You will be able to browse our NFT portfolio and purchase NFT’s we have created.
What are your thoughts on NFT’s?
Let us know in the comments.
We hope you enjoyed this video and found the information useful in your research.