A Guide to Non-Fungible Tokens

Imagine watching a 10-second clip of your favourite celebrity, and then imagine owning the 10-second video clip. A clip that in the entire population of 7 billion, you alone own. Digitally, this is known as a token. A token is something that has visible representation. It holds its entity in the crypto world. For example, your driver’s license or your office ID card. All of these hold some value and data. They give the certification that this belongs to you and you alone, yet it can also be replaced if lost or misplaced.  rnTokens are certifications of your ownership stored on a blockchain database. They are two different types of tokens; fungible and non-fungible.

Fungible Tokens

Fungible tokens are those assets that do not have their own unique characteristics. They can be replaced or exchanged.

Gold, property, dollars are all types of fungible assets that have value but can be replaced with something with immense value.

Land can be sold and dollars and be exchanged.

You have no ownership on all of these items, and you can’t really call them your own.

Unless they are in your piggy bank at home, but you are going to have to take them out someday!

Non-Fungible Tokens (NFTs)

Non-fungible tokens are completely the opposite of fungible. These assets can be owned by an individual, and only that single person holds ownership over these items.

Non-fungible means that tokens cannot be replaced, exchanged and each one is unique in itself.

Like a ledger states who has written the block, in the Non-fungible tokens ledger, it states who the owner is.rnThere is no third party involvement. It is direct trading.

Examples of NFTs

1. ArtworkrnIf you have a favourite artist, you can support their artwork by purchasing their original art by buying it digitally. They can sell their artwork to you, and you can buy it using your non-fungible tokens.rnNow you are the only real owner of their original art in this world. 2. GamingrnYou can buy in-game items in a virtual game on Enjin by using Enjin Coins. These are a type of NFT crypto coins. 3. LandrnYou can also buy land or a piece of land virtually using your NFT in any part of the world.rnBasically, all NFT depends upon is the person willing to pay any amount. Blockchain supported fungible tokens and still do as NFT’s are very new to the market. It also depends upon the hype it receives. An article stated, if the hype dies down, NFT will suffer some big losses. But it doesn’t seem like it is going anywhere soon. A recent article by CNN stated, over the first quarter of 2021, the market value of 38 NFTs tracked by CoinMarketCap mushroomed more than eightfold to $22.5 Billion. The beginning for all this Non-Fungible craze was with the Crypto Kitties Video game, launched on Ethereum. In here, each kitten was unique, individual and could not be duplicated.rnAccording to New York Times, a buyer bid $140000 Million on the Crypto Kitties! Most of the non-fungible contracts belong to Etheruem as it is the blockchain basis for most of the tokens such as ERC-271, ERC-1155 (the Enjin Coin), used for virtual gaming.rnThe prices for the Non-Fungible tokens differ.

NFT Prices

NFT prices for Enjin Coin are $2.09. For Theta, it is $10.11.rnThe market, as of right now, only seems to be growing.rnBut even after this, people are still very sceptical about the NFTs. It is an unsure and new place to be at.rnNFTs also cause a lot of carbon emission that is very harmful to the environment. Blockchains like Ethereum use up huge amounts of electricity normally, which adds up to more and more emissions. Being careful and aware of what to buy and what not to should be on your priority list. You might buy some art that is completely useless because you have no idea about it and are new to NFT. A long time demand should be attached to the artwork, collectible or in-game items you purchase. Because what you may buy today, because of the hype, you may not be able to sell it to a digital buyer tomorrow or worse, you may not find a buyer at all. NFT may be the future of crypto with its uniqueness and no duplication rulings. To be honest, being an owner of one of a kind collectible is a big thing. After all, having a da Vinci and owning it is different than going to the museum and seeing it!