NFTs Explained | Dr. Christopher Zed | Vancouver, Canada
The rise of digital assets has been rapid and is evolving right alongside blockchain technology. Various digital assets are currently being developed, such as utility tokens, privacy tokens, and cryptocurrencies. In the year since the inception of NFTs , there have been countless reports about corporate cash grabs and the multiple million dollar hacks of these projects.
Non-fungible tokens (NFTs) are a fast-growing part of the crypto industry. This article will explore their various features and functions.
These assets are digital assets that contain information that is stored in smart contracts. Unlike other digital assets, which another token can easily replace, NFTs are not fungible. This ensures that they can’t be exchanged for like. For instance, if a banknote has the same value, it can be exchanged for another without affecting the holder.
Non-fungible tokens are typically not issued in a way that they can be easily divisible. This is unlike the case with concert tickets, where a certain amount of tickets would not be worth anything on its own. In recent months, investors have started experimenting with the concept of fractionalized non-fungible tokens. These assets are still considered securities, though they are legal grey areas.
What Makes It Special?
Non-fungible tokens have distinct attributes, such as linking a specific digital asset to a physical asset. They can also prove ownership of digital items, such as game skins.
In the same way that banknotes and coins are fungible, non-fungible tokens are identical when exchanged. Non-fungible tokens can also be used to prove the scarcity or value of various digital assets. For instance, they can represent artworks or virtual land parcels.
Future of NFT
Most of the attention surrounding non-fungible tokens is currently focused on gaming and crypto-collectibles. For instance, they can represent the in-game items that are used in games, such as skins. They can also be used to perform various functions, such as ticket sales and the trading of video games.
In addition, non-fungible tokens can also represent various other functions, such as licensing and certifications. With the immutability of their smart contracts, they can be stored in a digital wallet, making it easier for people to access and manage their assets. One day, a digital wallet could contain all the proof of ownership of every asset, license, and certificate.
Originally published at https://drchristopherzed.net on July 22, 2022.