{"id":4311,"date":"2021-02-20T16:24:14","date_gmt":"2021-02-20T16:24:14","guid":{"rendered":"https:\/\/atozcrypto.org\/?p=4311"},"modified":"2021-02-20T16:25:53","modified_gmt":"2021-02-20T16:25:53","slug":"a-detailed-analysis-of-nfts-non-fungible-tokens-crypto-digest","status":"publish","type":"post","link":"https:\/\/atozcrypto.org\/a-detailed-analysis-of-nfts-non-fungible-tokens-crypto-digest\/","title":{"rendered":"A detailed analysis of NFTs (Non-fungible tokens): Crypto digest"},"content":{"rendered":"

Non-fungible tokens are becoming mainstream, yet people are not aware of them fully yet. We will discuss them in detail so that you can understand their importance in the cryptocurrency community.\u00a0\u00a0<\/span><\/i><\/p>\n

If you want to dive deep into the vast sea of cryptocurrency<\/a>, you would need to learn the A to Z\u2019s of it. To help you with your education, today we will be discussing NFTs, what they constitute, their advantages and disadvantages respectively.\u00a0<\/span><\/p>\n

What are NFTs?\u00a0<\/b><\/p>\n

Plainly speaking, NFT is the acronym for Non-Fungible Tokens. These tokens can be used to depict items that are unique and irreplaceable, hence, the name non-fungible.\u00a0<\/span>
\n\"Back<\/a><\/p>\n

Unlike cryptocurrency tokens, these are unique as well. These tokens can represent anything, from a cryptocurrency to a physical entity. Two standards are the building blocks of NFT (ERC-721, and ERC-1156), and developers leverage them while creating new tokens for the cryptocurrency community.\u00a0<\/span><\/p>\n

Can any token be considered as an NFT?\u00a0<\/b><\/p>\n

No, it is not that simple. An NFT should not be:\u00a0<\/span><\/p>\n

Replaceable:<\/span><\/i> You can replace a dollar or a pound with a dollar or a pound, and there\u2019s basically no difference between them. Hence, fiat money is not an NFT. Similarly, you can replace a Bitcoin<\/a> with another Bitcoin. However, an NFT should be distinct from another in every sense. Therefore, an NFT must be scarce.\u00a0<\/span>
\n\"\"<\/a><\/p>\n

Divisible<\/span><\/i>: A NFT will exist in the market as a single unit, they cannot be partitioned into smaller sections.\u00a0<\/span><\/p>\n

Eliminated and copied<\/span><\/i>: This is a must if we want clause 1 to be true. No one can copy the characteristics of an existing NFT. This means the holder owns all the rights of this asset.\u00a0<\/span><\/p>\n

But what it should be? Other than being distinct, that is:\u00a0<\/span><\/p>\n

Verifiable: The data present within the NFT should direct people towards its rightful owner (creator), thus creating a sense of authenticity within the market sphere.<\/span><\/p>\n

How are these tokens used?\u00a0\u00a0<\/b><\/p>\n

There are numerous examples, but we will discuss the most popular one, CryptoKitties. In this Blockchain-based platform, people (designated as players) can purchase, and sell digital felines. The primary currency for these transactions is Ethereum<\/a>. Generally, collectors, players, and in some cases, investors are heavily invested in the idea of having NFTs. one can choose to sell this token for huge profits.<\/span><\/p>\n

Other examples will include:\u00a0<\/span><\/p>\n