This content originally appeared on DEV Community and was authored by cristopher salazar
NFT token, which, like other cryptocurrencies, is active on the blockchain platform; These days it is one of the most popular and discussed concepts in the world of cryptocurrency. NFTs are a non-interchangeable and proprietary type of cryptocurrencies that can be used in a variety of contexts to make them unique.
In this article, we intend to review the features and applications of these tokens. But before we begin, we need to mention the concept of interchangeability (if you are unfamiliar with the concept of tokens, it is best to read the article on the difference between coins and tokens first).
What does interchangeability mean?
Fungibility means that one currency or asset can be exchanged for another currency of the same value. This asset also has the ability to be divided into smaller parts.
To better understand this concept, imagine you have a 50,000 Toman banknote that you can exchange with a banknote of the same value. Or you can exchange it with banknotes with other amounts, the total of which is 50 thousand tomans.
Therefore, your 50,000 Toman banknote, in addition to being replaceable with other banknotes of the same value; It can be divided into other amounts. So this banknote is a exchangeable currency.
This example also applies to digital currencies such as Bitcoin, Ripple, Atrium, Bitcoin Cash and other cryptocurrencies. One bitcoin can be exchanged for another bitcoin and it can be divided into smaller parts (satoshi).
In a nutshell, currencies that have one unit of equal value against another unit of the same currency are exchangeable or Fungible.
What is an NFT token?
Non-Fungible Token, or NFT for short; An encrypted digital currency that issues a title deed to a digital work in the blockchain space.
These tokens were originally developed based on the ERC721 standard, which is similar to the ERC20 standard, and were known as a specific atrium token. But now they are being developed on other blockchains as well.
Main features of NFT token
1. Irreplaceability
This is the main feature of NFT tokens. These tokens cannot be exchanged for an asset like their own.
2. Rarity
The developers of these tokens have the ability to produce them in large numbers, but their preference is to produce NFTs in limited numbers and to keep these tokens unique.
3. Indivisibility
NFT tokens cannot be broken down into smaller sections. NFT always remains a single token.
4. Being unique
These tokens have registered and immutable information and this information is the certificate of NFT authenticity.
Advantages of NFT tokens
1. are transferable
These tokens can be bought and sold in certain markets and not in digital currency exchanges. The price of NFT is calculated based on its uniqueness.
2. They are valid
As you know, there is no possibility of forgery in the blockchain space. Irreplaceable tokens are also active in this context; Therefore, their authenticity can be assured.
3. The right of ownership is reserved in them
The information cannot be changed or deleted after being registered in the blockchain blocks. Therefore, since NFT token data is stored on blockchains, it is not possible to change their original data under any circumstances, and the original rights of the original owner of the work are always protected.
What are the differences between NFT tokens and Fungible tokens?
Non-Fungible tokens are fundamentally different from Fungible tokens. The main difference between these two types of digital currency tokens is in the same interchangeability that in NFT tokens it is not possible to exchange tokens with the same type (same value).
These tokens also contain specific information that is recorded exclusively on them. The exclusivity of this information can be compared to the information on the plane ticket. Passenger information, exact travel time, travel destination and row and seat number are entered on the plane ticket and no one else can travel with that ticket. The data recorded on the NFT token is also exclusive to that particular token.
Another difference between NFT and interchangeable tokens is the divisibility. NFT tokens cannot be broken down into smaller pieces and always remain a single token.
Finally, non-replaceable tokens contain more information than replaceable tokens.
What are the uses of NFT?
NFT tokens can be used in a variety of contexts, and these tokens are not limited to a specific domain or the world of cryptocurrencies.
1. Registration of digital artwork
Artists working in the field of digital arts; They can use these tokens to register their works and no longer have to worry about copyright and theft of their works.
2. The gaming industry
Professional gamers can transfer their assets in the gaming world to various games through NFT tokens and use them in spaces where in-app purchases are limited.
3. Digital assets
Ownership of any digital asset, such as an Internet domain or a social media account, can be permanently registered in the name of a person or group through a non-exchangeable token.
4. Physical assets
These tokens can even be used when trading non-digital assets, such as buying a house or car, and registering ownership of a property or car on a blockchain platform.
The NFT token can also be used in the field of personal identification or registration of academic and personal documents. NFT has also received a great deal of attention from collectors in the field of collecting works. But these are just some of the uses of NFT, and certainly in the future these digital currency tokens will enter more domains and become more popular around the world.
Some successful NFT token projects so far
CryptoKitties: A platform for producing, buying and selling cats in the popular virtual cat Atrium blockchain game
OpenSea: Active system for registering works of art and collectibles via NFT token
Ethereum Name Service: The system for providing domain name services and registering them through NFTs
Async.Art: A platform for registering and buying works of art by NFT
Decentraland: A platform for virtual land distribution
Origin Protocol, FLOW and Rarible projects, Azure Heroes and AlterVerse games, and programs such as NBA Top Shot and Dr. Seuss to present and record collectible digital assets are some of the other projects that have successfully used irreplaceable tokens to date. But due to the growing trend of people towards the blockchain world in various fields, as well as the growing popularity of NFT among different classes and fields, we will undoubtedly see a multiplication of Non-Fungible Token-based projects in the not-too-distant future.
Concluding remarks
Considering the points we have made so far regarding the NFT token; The question arises as to why these tokens have not yet been properly raised and used in the world.
The first reason is the substrate of irreplaceable tokens. Blockchains are a fascinating world for those with enough knowledge; But those who are not familiar with this technology and decentralized networks have not shown much interest in joining the users of these networks. NFT technology alone may be very enticing, but its platform has not yet been able to impress all individuals and groups.
The next point is the decision of the developers to keep these tokens scarce. Because NFT tokens are growing and developing very slowly; Using them is costly and organizations and individuals are trying to use lower cost technologies and get less access to these digital ownership documents.
This content originally appeared on DEV Community and was authored by cristopher salazar
cristopher salazar | Sciencx (2021-12-06T08:30:17+00:00) What is an NFT token? It’s all about the irreplaceable token. Retrieved from https://www.scien.cx/2021/12/06/what-is-an-nft-token-its-all-about-the-irreplaceable-token/
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