Blockchain applications have come a long way in the past ten years, from Bitcoin to Bitcoin Cash to Litecoin and the like; Ethereum and its ERC20 (and ERC721) token protocol; and most recently, CryptoKitties, making NFTs (“non-fungible token”) famous overnight. For example, the platform yuan pay group charges zero commissions on profitable and non-profitable trades for a costless bitcoin trading venture visit. CryptoKitties were first conceptualized 5 years ago, with an alpha release in May 2017. Check Out The official website for more details.
The explosion of NFT trading on crypto markets was one of this new industry’s more interesting side effects. The trend caught fire overnight. As a result, NFTs have taken the world by storm. Ethereum—a blockchain-based innovative contract platform that enables developers to create decentralized apps—is the first significant blockchain to implement the ERC20 token standard, which defines a set of rules for creating new tokens based on Ethereum. CryptoKitties is an example of a dAPPs built with Ethereum smart contracts and powered by NFTs.
Anyone can create their unique virtual cats (or dogs/cards/ anything) – they’re called CryptoKitties because they’re based on the ERC-721 token protocol, and this is just an example of how NFTs look like and work. Thousands of famous NFTs have skyrocketing value and are in demand in the global market. So let’s understand everything you should know about NFTs.
Understanding Non-Fungible Tokens (NFTs):
Non-fungible tokens, or NFTs, are a digitized representation of a unique asset. Their value is derived from their scarcity. Unique information contained in a non-fungible token can determine whether or not it is authentic, has been used (or not), is digitally signed by its owner, and much more.
Non-Fungible tokens enable developers to create digital representations of unique assets, such as land title ownership, collectibles, documents, original artworks, and other assets with intrinsic value. In the case of CryptoKitties, for instance, each cat is unique — it has its characteristics and belongs to one owner only. Non-fungible tokens can represent your membership in a group or organization, a document attesting that you own a piece of land, or even a collectible item like a Crypto Kitty. For example, the ERC721 standard allows the creation of unique and non-interchangeable tokens through Ethereum smart contracts.
Non-Fungible Tokens Are Practically Indestructible:
NFT means that if someone intercepts your information maliciously or accidentally, it won’t be valuable to them. Furthermore, NFTs belong to a designated owner. Therefore, they are generally considered “immutable” or safe from alteration: you can’t paint them, remove bits of data from them, edit their lifespan, change the supply of non-fungible tokens in circulation, or destroy them (unlike fungible tokens). In most cases, someone can’t change the value stored within a blockchain.CryptoKitties are an example of limited edition collectibles that has caused a frenzy among crypto enthusiasts.
Why Are NFTs Important?
NFTs’ value is derived from their rarity, non-fungibility, and scarcity. For instance, Axis are all unique, and it would be nearly impossible for someone to create new Axis that look like the original ones after a limited amount of time in circulation. In addition, the scarcity of specific items is generally based on many factors – how long ago it was mined, how much mass/volume it has, and how many people wanted to buy it.
So in practice, this leads to an increased value for NFTs compared to fungible tokens because of two main factors: 1) far fewer tokens are available (or available at a significantly lower price). 2) The tokens are unique (and have meaningful metadata attached to them).
NFTs enable the creation of a new class of assets. Since NFTs represent non-fungible assets, people can create new markets and contracts around purchasing, owning, and moving non-fungible assets. In the case of Axis, for example, users collect, breed, and trade virtual Pets that are stored on the blockchain. Moreover, blockchain allows us to assign ownership rights to virtual objects through NFTs.
How Does The Technology Behind NFTs Work?
The ERC-721 standard is the standard used by CryptoKitties, in the case of NFTs. An implementation of this standard is an Ethereum smart contract. This ERC defines how you can interact with different non-fungible tokens — for example, how you can transfer them, how many exist, and what their metadata looks like. NFTs are made possible thanks to the fact that we now have a technology upon which we can store information about practically anything that has value to us. Until now, storing and retrieving such information in computer code was impossible.