NFTs have been around since the 1990’s but it wasn’t until 2017 when CryptoKitties became popular and introduced NFTs to mainstream media. Since then there has been an increase in popularity for this form of digital entertainment. One company that is making waves with their takes on NFTs is Dapper Labs Inc., who developed the game CryptoKitties back in November 2017, followed by one more game called KittyHats which launched just last week.
What are Non Fungible Tokens (NFTs)?
Non fungible tokens are a form of digital collectibles that can be found in games or on platforms like ERC721s. They are unique, scarce and cannot be manipulated in any way which means they are distributed based on the rules of the contract every time. Distribution of NFTs is called a “drop”.
In order to understand the pros and cons of each type it’s important to have a good understanding of what makes them unique.
NFTs have their own specifications, so in order to choose the right one it is important to ask yourself a few questions:
- What do you want your token to represent?
- How many units should be available?
- What kind of blockchain do you want to distribute the tokens on and why?
Tokens can be divided into two main categories: fungibles and non fungibles. Fungible tokens are interchangeable or divisible, and therefore represent a tradeable good which has uniform quality and quantity. They can be split down into smaller fragments so they can be traded or sold in parts.
Non fungible tokens are unique and can therefore be seen as a collectible. Every token is different so you won’t find two identical ones in existence. NFTs can also have various properties which will determine what each one represents.
How do they work?
Non Fungible Tokens, or NFTs for short, is a relatively new category of tokens that can be found on the blockchain. Their uniqueness and scarcity provides scarcity in the market and they cannot be manipulated in any way which makes them unique collectibles. Because of its similarities with standard fungible tokens, they are often created using smart contracts on the Ethereum blockchain, but are still in the early stages of their life.
NFTs are created by splitting up an ERC20 token into multiple pieces which would mean that each piece is one of a kind and unique which offers different possibilities for creative game design choices, among other applications.
Every NFT will exist in perpetuity regardless of what happens to the original contract which could result in large quantities of NFTs. One solution that can be applied is to burn leftover NFTs which means that they are destroyed by sending them to an address with an unknown private key. This will make remaining tokens more valuable.
What are some examples of NFTs in the market today
A popular NFT in the market today is CryptoKitties. Each kitty is a unique token that cannot be manipulated, duplicated or removed from your digital wallet. There are a few different ways to buy CryptoKitties: you can breed them or buy them from other players on their marketplace. The price of each kitty is determined by its scarcity and uniqueness.
Another popular NFT is Gods Unchained. The cards in this game are ERC721 tokens, which means that each card is a one-of-a-kind token that cannot be copied, tampered with, or removed from your wallet after purchase. Also, scarcity is determined by the rate of “drops” where more rare cards will have less drops and more common cards
Why should you get involved with NFTs now
There are a few reasons why you should get involved with NFTs now. The first reason is that they are unique and cannot be replicated. This means that the value of NFTs will only continue to increase as time goes on. Additionally, NFTs are stored on blockchain technology, which makes them secure and tamper-proof. This means that you can be sure that your NFTs will be safe and will not be stolen or manipulated in any way. Finally, NFTs are a great investment opportunity and have the potential to return a significant amount of profit. So, if you’re looking for a unique and potentially lucrative investment opportunity, NFTs are definitely worth considering.
What is a “drop”?
A drop is a distribution of NFTs. In ERC721 this happens when the owner of an NFT wants to send or trade their tokens to another party or wallet, in most cases they would do this by initiating a smart contract which will determine the rules under which the ‘drop’ occurs and then will distribute the tokens accordingly.
Another type of drop can be seen in games where players are rewarded with NFTs for completing certain tasks or on platforms like ERC721s where they are distributed by the rules of the contract at each time.
The future of blockchain technology
Blockchain technology has the potential to create new forms of digital collectibles, games, and experiences that we haven’t yet seen before. There are many people who are contributing to this space, working to find new ways to harness blockchain technology for these purposes. We’re seeing more individuals coming up with blockchain-based games that are able to be played on smartphones or other mobile devices. As the space continues to grow, it will be interesting to see what happens next in the world of blockchain-based games and digital collectibles.
This article has given you an overview about what non fungible tokens (NFT) are and how they work to help you understand them better. The future looks promising for blockchain technology with more people understanding this new type of token that seems to offer so much potential for entrepreneurs looking to launch their own game or platform featuring these items!