Non-Fungible Tokens — The simplest explanation
NFT isn’t a new concept
Ever wondered what led to the concept of Non-Fungible Tokens? If you go back in the time horizon, it was you playing monopoly with your friends. Sweet memories, aren’t they? And, I strongly believe, the idea of monopoly was the baseline for NFTs. Like you have a printed or tokenized representation for each of the assets on the game board, Non-Fungible Tokens are cryptographic tokens that represent unique real-world assets.
Ever heard of fungibility?
Fungibility is the ability of any unit that can be interchanged with a similar unit or any unit of similar value. The concept of fungibility is not new to us. It started right from the time of the barter system (a type of trade where commodities are exchanged based on approximated values). The currencies we use in the world now are a perfect example of the fungible medium of exchange. A one-dollar bill can be exchanged with a 70 rupees (INR) bill given that the value of the dollar approximately matches its INR value.
What are Non-Fungible Tokens?
Non-Fungible really means the tokens are not interchangeable. The main idea is to bring scarcity into the digital world by making each token unique. The uniqueness of tokens functions as verifiable proofs and ownerships with a distributed ledger. Most decentralized applications (DApps) use the concept of Non-Fungible Tokens (NFTs) to allow users to create their own digital collectibles. These unique NFTs can be collected from various creators through open NFT marketplaces which also helps the creators to take their digital creations across the globe.
Ethereum standard tokens and NFTs
Since NFTs are the hottest topic in the blockchain space right now, there are various protocols existing in the market to facilitate the issuance of NFTs. Though there are a variety of protocols when it comes to DeFi and NFTs, Ethereum is the pioneer that threw light on these technologies. ERC-721 (An etherum standard token) is the most prominent token used for issuance and trading of NFTs on the ethereum blockchain. And, there come another ethereum standard token ERC-1155, that uses a single smart contract to exhibit both fungibility and non-fungibility.
Next level gaming with NFTs
Though NFTs disrupted a lot of sectors including but not limited to music and content creation, gaming has always been the most benefitted of all. NFTs introduce an immense level of interoperability among games deployed on the blockchain. What if you can share your in-game assets with your friends or trade them worldwide? Gaming would be real fun with NFTs being implemented. Also, the gamers can enjoy complete control over their as NFTs offer proof-of-ownership. Also, the data is stored in the blockchain and not centralized servers of the game development organizations, ensuring the integrity and privacy of data.
