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What is a NFT?

Banxe Team
3 min read 11.07.2022
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NFT stands for non-fungible “cryptographic” token, meaning it is a token that is unique and cannot be replaced or exchanged, including with a transfer or exchange mechanism for digital object certification that is used in the blockchain. An example of an NFT isany image, GIF, song, and even the first post of Twitter creator, which also gained attention in the world of NFTs.

NFT technology was created in 2017 based on Ethereum smart coins. The first work of art with NFT technology was the work of the English artist Banksy called "Morons".

To facilitate the creation of NFTs, certain standards have been created, such as ERC-721, ERC-721R, ERC-1155, and many others. However, ERC-721 is the best known, which serves as a parameter for issuing and trading non-fungible assets on the Ethereum blockchain. All of these standards improve interoperability, making it easier to transfer tokens between applications.

Each NFT comes with its own identification code, which allows it to be uniquely identified from all other NFTs, giving it unique ownership of the original resource.

The undoubted advantage of this technology is the absence of intermediaries between the seller and the buyer. Like any other tokens, it is possible to exchange/sell/buy/donate an NFT. Special blockchain marketplaces are used for this purpose. Currently, one of the largest platforms is called OpenSea. There, you can find the biggest NFTs like Moonrunners Official, Ape Yacht Club, and many more.

When creating a collection of NFTs, the marketplace takes a certain commission, called gas. Artists can also monetize on their work after it’s been released; in transactions between users and a possible royalty assigned by the community that released the collection. 

If you've gotten bored of pictures and songs, discover PTE (Play to Earn), a game developed with NFT technology. These are blockchain-based games that reward players with digital assets such as NFTs, character skins, or cryptocurrency. They can be earned by completing levels, participating in contests, or simply taking the time to play. Player Assets can be used to unlock additional rewards sold on the game’s digital marketplace. A significant difference between standard video games, which many players are used to, and PTE games, is the decentralisation of the latter, as they are collectively controlled by both users and game developers. Players themselves participate in the games economy, while creating value for other users.

 

What is the difference between NFT and cryptocurrency?

Since a non-fungible token means one of a kind and cryptocurrencies are actually fungible, meaning not unique, they are not similar. One Bitcoin equals one bitcoin, where NFT is distinct and has different values.

 

Why is NFT the future?

NFT will continue to play a major role because it’s a decentralised peer-to-peer trade and the transactions are transparent. It eliminates the need for intermediaries and allows creators to be innovative and well compensated. NFTs capabilities are quite extensive: from art, smart contracts, to event tickets and its use in digital worlds such as meteverse.

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