Non-Fungible Tokens (NFTs): All You Need to Know
Tags: Technology, Blockchain, Fintech, Tokens

The crypto space is one of the most innovative fields that I have come in touch with. It is ever changing with new projects popping up and new innovative applications of the blockchain technology driving it.

Just to set the context here, the crypto market can be seen to have three broad categories: Bitcoin, Altcoins and Tokens. Don’t think I have to delve much into this but Bitcoin is the world’s very first decentralized digital currency and has been receiving a lot of attention lately given its price surge. Altcoins, short for “alternative coins”, are basically any other digital asset that operates on its own native blockchain; Ethereum and Litecoin fall under this category since they have their own independent blockchain. Last but not least, tokens refer to digital assets that runs on the blockchain of a specific cryptocurrency.

For this article, I’d like very much to delve into a specific type of token — non-fungible tokens (NFTs). Sounds complicated, but not really.

When something is fungible, it means that it is interchangeable. For example, if you lend your friend a $10 bill, you wouldn’t mind if you get a different $10 bill back. Conversely, when something is non-fungible, it is unique and irreplaceable. For example, artwork like the Mona Lisa is definitely not interchangeable with another piece of art; flight tickets bearing your name are also not interchangeable.

So applying that to NFTs, these tokens have smart contracts that allow for detailed attributes recorded in their smart contracts, such as identity of the owner, rich metadata or secure file links. This thus allows NFTs to be used as means of proving ownership or authenticating items online.

Another notable feature of NFTs would also be that they are not divisible; in the same way that you can’t exactly share a piece of artwork you bought by cutting it up, NFTs will be worthless if they are ever “divided”.

Examples of NFTs

One of the first ever NFTs created would be the CryptoKitties that was launched in 2017, which are just really cute mutant kitties that you can breed, trade and buy. Each of these blockchain-based cat is unique and cannot be replicated, taken away or destroyed. Think of this KittyVerse as an upgraded version of Neopets and you got it.

Today, we also see NFTs being used for digital assets that need to be distinguished from each other to prove their value or scarcity; in the music industry, artists have issued tokens that will accord purchasers exclusive listening rights to new tracks; in the sports arena, binance has partnered with a fintech firm to offer fan tokens for teams like FC Barcelona and Paris Saint-Germain; in the entertainment realm, BBC has released a NFT-powered digital trading card game that turns characters into NFTs.

With more physical assets being represented by NFTs on blockchain, I am looking forward to see how ownership will be redefined in the future, especially with regards to our finance ecosystem, insurance markets and social networks.

Today, we already see a few platforms that are aiming to democratize the use of NFTs.

One of my favourite platforms to utilize would be Mintable, a marketplace to buy and sell digital items on the blockchain. Mintable allows you to buy and sell a myriad of products ranging from files, artwork, music, images and documents. Utilizing smart contracts which are already built into the system, these items live on the blockchain and when you buy them, they are deposited into your wallet. You have 100% verifiable proof that you are the owner of whatever you buy.

If you are a creator, Mintable is also a great way to further monetise your work. You can upload your pieces of work on Mintable and leverage the digital platform to provide exclusive benefits to buyers when they purchase through the blockchain. For example, you could award buyers exclusive listening rights or rare album covers that they can download after purchasing your items. For such NFTs, rarity can greatly increase the value of your product because of the collectability factor, where people will want to hold onto that item to resell it in future when its value increases. With its intuitive platform, it is perfect for those looking to make their first foray into the space and earn some crypto.

You can find out more about Mintable here.

Till next time, friends online!

Gale.