Non-Fungible Token
Non-Fungible Tokens are tokenized versions of a non-fungible assets such as artwork, real estate, collectibles (in-game assets in our case). These assets possess properties and individual characteristics that make them unique and valuable. Non-fungible tokens can be used to create verifiable digital scarcity, as well as digital ownership.
NFTs are not a new concept and the first NFT-like token was the introduction of Bitcoin 2.x (aka colored coins) in 2012. While not being a new concept, the launch of Cryptokitties - a blockchain-driven platform where players have the chance to collect and breed digital cats, brought the attention of the world to this unique technology and thus began the NFT race. Cryptopunk was launched in 2017, the first project that aimed to tokenize artwork using NFTs.
Why are NFTs Special?
The specialty of non-fungible tokens revolves around three concepts, namely; Uniqueness, Rarity & Indivisibility.
Uniqueness: One major feature that makes NFTs special is the fact that each NFT is unique. Unlike fungible tokens, each NFT has its own unique properties (metadata) that are peculiar to one token. It's impossible for 2 NFTs on the same platform to have the same properties.
Rarity: NFTs are rare collectibles with limited supply. The scarcity mechanism is one thing that makes owning a non-fungible token special.
Indivisibility: Unlike fungible token, a non-fungible token can not be divided into smaller units. Bitcoin and other fungible assets can be split into smaller units but non-fungible tokens need to be bought, sold and held as a single unit.
The use case of NFTs varies depending on the business model of the platform. While for the most part, it has been used to represent arts and in-game assets, its use cases are not limited to arts and gaming alone. NFTs can be used to represent company shares, bonds, real estates, membership and many other things. Terra Virtua has been able to successfully implement NFTs into art, Cryptokitties and GodsUnchained brought NFTs to in-game assets, while Decentraland, The Sandbox and Spheroid Universe are giving NFTs a unique use case in the digital real estate industry.
Citizen Finance's introduction of NFTs for in-game assets is mainly to promote true ownership of in-game assets and enable players to legally exchange assets between one another.
Last modified 2mo ago
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