The world of cryptocurrency is constantly changing. New innovations and ideas are emerging every day, and there’s no better example of this than non-fungible tokens (NFTs). NFTs are a type of digital token that is unique in some way, rather than being exactly the same as every other token of that type. This makes them very different from other cryptocurrencies such as Bitcoin or Ethereum. Let’s take a look at what NFT tokens are and how they work.
What Are Non-Fungible Tokens?
Non-fungible tokens, or NFTs, are digital tokens that are unique or non-fungible. The word ‘fungible’ means that two or more items are interchangeable or identical. Common examples of fungible items include money or commodities like gold or oil. Each unit of a commodity like oil is exactly the same as every other unit of that commodity, so you could trade one barrel of oil for another barrel of oil without any issue as they are identical. NFTs are the opposite of this — they are unique. Two NFTs are never going to be identical. They might have the same value, but they are unique items. This is important because when you own an NFT, it is like owning the item itself.
Let’s use a rare comic book as an example. If you own a rare comic book, you don’t just own a digital token that says you own that comic book. You actually own the comic book itself. This means you can do whatever you want with it. You could sell it, keep it, or even throw it away. You can do whatever you want with the physical comic book, but you can also do whatever you want with the digital token that says you own the comic book.
How Do NFTs Work?
Some NFTs are built on top of other blockchains, while others are implemented on their own blockchain. An example of famous NFTs is CryptoKitties.
CryptoKitties is a game built on Ethereum. The game contains collectible, breedable, and highly addictive digital cats called CryptoKitties! Each cat is unique and 100% owned by the end user; A cat cannot be copied, taken away, or destroyed. Once you purchase a CryptoKitty, it is in your ownership – just like your car or your refrigerator. This means that all CryptoKitties and all contracts related to them are executed and stored on the Ethereum blockchain.
Many NFTs are issued using a software known as a non-fungible token (NFT) issuance platform. These platforms enable people to host token sales, create (a.k.a. mint) their own NFTs, and manage these assets. There are many different NFT issuance platforms and marketplaces available to choose from, so it’s recommended to find a reputable one to reduce the risk of scams.
Why are NFTs Important?
There are many different uses for NFTs. Some people use NFTs as digital representations of real-world assets like real property, artwork, and sports memorabilia. Other people use NFTs as digital representations of digital assets like in-game items, online tutorials, or even online identities. These assets are sometimes referred to as virtual assets or non-fungible tokens. Virtual assets are unique and non-interchangeable like NFTs, but they aren’t necessarily tokens. NFTs are important because they enable the tokenization of almost anything. What does this mean? Well, NFTs are the first tokenized assets that people can truly own. They can’t be censored or taken away from the owner. They can’t be frozen or hacked.
And the best part is, you don’t need any middleman authority or institution like a bank or a government department to stand guarantee that the NFT is authentic. The proof of authenticity is on the blockchain – and that’s independently verifiable proof forever. Once your proof of ownership is on the blockchain, literally no one can change it. Not even the government. This is something that has never been possible before, so it’s a big deal.
NFTs are for everyone. Literally everyone. And not just for tech experts.
The main reason that NFTs are for everyone and not only for technology experts is that NFTs are very simple to buy, own, trade and sell. All you need is a crypto wallet and an NFT marketplace – like Kulturemint.com. On an NFT marketplace, anyone with even basic computer skills can buy and sell NFTs of digital assets. These assets can include things like sports memorabilia, real and virtual property, artwork, music, poetry – pretty much anything else you can think of that people own or invest in. The only requirement to own these assets is access to the internet. Anyone with access to the internet can buy NFTs starting with a small amount of money.
Currently, there are two ways to purchase NFTs. The first way is to buy them during an initial coin offering (ICO). An ICO is like a crowdfunding campaign, but instead of receiving money, you receive tokens. The second way to purchase NFTs is to buy them from digital creators – someone who creates digital products and then mints an NFT for their own products, or via resale by someone who owns NFTs by purchasing them from an exchange – an online marketplace where people can buy and sell NFTs.
So how can one buy NFTs on an NFT marketplace? Simple:
- Get a digital wallet like Metamask, and then purchase Ethereum. Since most NFTs are Ethereum-based tokens, marketplaces for collectibles accept Eth tokens as payment.
- Connect your MetaMask wallet to a trusted NFT Marketplace such as kulturemint.com
- Buy Your NFT.
Once you buy your NFT, your proof of ownership will be forever listed on the blockchain. And when you decide to sell that NFT, the person who buys your NFT will have their token of ownership permanently entered into that blockchain.
NFTs – Finally, a way to confidently transact online.
Buying high-value assets and investing our money has always been complicated. Even more so when done online. Complexity and a lack of trust in the system have always been hurdles that made the average person hesitate to go beyond basic low-value online commerce. NFTs might have just changed that forever. NFTs, crypto and blockchain have today enabled the tokenization and authentication of almost anything, without needing to trust an authority or government institution to authenticate it.
NFTs thus created a brand new way for people to buy and trade digital assets online without relying on “trust” between the buyer or seller. NFTs are perhaps the most decentralized way to transfer value online. Its future is therefore unlimited.
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