NFT is a unique digital token on Blockchain that allows high-value asset trading to be done digitally, resulting in an excellent chance for investors to make a profit.
Interest in NFT emerged from the gaming industry, yet NFT offers much more use cases than most people realized. Let’s find out what NFT is and why investors have to know about Non-fungible tokens.
What is NFT (Non-Fungible Token)?
A non-Fungible Token or NFT is a cryptographic token leveraging blockchain technology to allows ownership of any assets. Each NFTs is unique, just like collectibles, arts, or your friend’s car. Think about it like this; if you borrow a car from your friend, you have to return the exact same one, not just any vehicle that is the same model.
You can also tokenize any assets. For example, let’s talk about art; if you create a $1 million piece of art in Thailand, and your buyer is in Italy, financial transactions, physical shipment, and all fees involved will not be as beautiful as your art. But if you tokenize your art to be a digital asset, it doesn’t matter where your buyer is. You can transfer your art ownership and process all the finances digitally, which is cheaper, faster, and more efficient.
How is NFT different?
NFT is mainly built on Ethereum using ERC-721 and ERC-1155 standards. A fantastic aspect of digital assets is that they can be anything. You can tokenize any assets from a unique collectible card game, arts, or a person’s fame.
Cointelegraph stated three differences of NFT:
- Unique – Each token is unique. It’s almost like a certificate you get with rare paintings.
- Rare – You can create scarcity by limiting the number of rare, desirable items in existence.
- Indivisible – NFTs cannot be split into smaller denominations — they can only be bought, sold, and held whole.
What is a Fungible Token?
A fungible Token is a token that is not unique and can be replaced. For example, you can let a friend borrow your bag of sugar, and that person can return any bag of sugar to you because they are all the same. The same goes with Bitcoin, which is a fungible token. You can lend someone 1 BTC and get any BTC back later.
What are the benefits of NFT?
NFT is beneficial for both buyers and sellers of any assets. It allows all assets, even rare pieces of art or collectibles, to be digitized easily. NFT also offers alternative investment since you can buy, sell, and increase the value of NFTs. NFT also reduces the cost of maintaining and securing any assets, which could disrupt the industry forever. For example, there’s no need for a big warehouse to store collectibles anymore.
NFT Use Cases
The use case of NFT has been proven in the gaming industry. Today, let’s find out what are some of the use cases of NFTs.
NFT for Arts
A few years ago, digitized arts might sound like saving some GIFs on the internet and sending it to your friend. You might be able to use the art, but there’s no way to increase the asset’s value. With NFT, you can buy, sell, and trade art online while transferring ownership and having an alternative investment opportunity. Guess how much does this image below costs?
This image of the cute little pink cat is from Cryptokitties, a famous Blockchain-based game on Ethereum where you can collect, trade, and breed virtual cats. Each cat is unique, and you can have ownership of the cat you want.
Someone ended up buying this cat with NFT for 600ETH or $390,000. This cat and others on Cryptokitties can also be traded on the secondary market, such as Opensea, which widens everyone’s investment opportunity.
NFT for Games
Sorare a blockchain-based fantasy football game that lets you trade and manage a virtual football team with players’ cards. Many famous football leagues, including Serie A and Bundesliga, are already a part of Sorare. Each card has a different color depending on how rare it is. For example, there are only one black card, ten blue cards, and 100 red cards. The game uses NFT for all card transactions.
The Summary of NFT
NFT or Non-Fungible Token allows us to expand the use cases of Blockchain far more than the financial industry. With NFT, you can reduce the cost of managing and trade the ownership of assets such as arts and collectibles digitally that also increase the liquidity and value of those assets for investors. It’s exciting to see what’s coming in the future for NFT. We are sure it would be something we’ve never seen before. Don’t miss any news about NFT by staying tuned at Zipmex!
If you are ready to step into the world of digital assets, take the first step and start trading without any fees at an officially licensed platform, Zipmex.
- Crypto Kitties