It’s been a little over 7 years since the first Non-Fungible Token (NFT) was created on Ethereum and sold for $1.4 Million. Now there are well over 21,858,123 million unique NFT on Opensea alone.
In this guide I will be exploring the future of non-fungible tokens and why they can provide such an interesting opportunity for creators, players, and investors alike.
I will also outline some of the most popular use cases for NFTs as well as some tips to help you make sense of what is happening in the industry right now. If you haven’t already read the article published by Mark Sullivanlong about The Future Of Cryptocurrencies then please do so before continuing with this post because it provides useful context for many aspects of tokenized assets.
If you are interested in learning more about NFTs or non-fungible tokens in general then hopefully this guide will be a good starting point.
Why Are Non-Fungible Tokens Important?
So why exactly are non-fungible tokens important? What makes them different than regular cryptocurrencies like Bitcoin and Ethereum? Well, every single token is unique which means they all perform different functions and hold different values.
One way to think about this is that cryptocurrencies like Bitcoin and Ethereum are both examples of fungible tokens while non-fungible tokens are simply a further development of these digital currencies.
In the past, people have been able to speculate on cryptocurrency tokens by trading or exchanging them. Often times when a token was worth more than another it would be viewed as having a higher value, however in reality this isn’t entirely true.
Fungible Tokens Within The Cryptocurrency Landscape
So what do I mean by fungible tokens? Well, imagine if you could instantly swap one US Dollar for another US Dollar or even 1 GBP for another GBP. This would be the ultimate in convenience if it were possible yet it suffers from a major drawback...there is nothing unique about anyone specific dollar so how could you prove ownership of your money if anyone could just take it from you? Furthermore, companies or individuals who want to track spending habits or transactions may not want their money to be interchangeable with anyone else's.
This is where non-fungible tokens come in because you need something specific about each token to ensure they are unique and different from one another. You likely already use some fungible tokens every day but just don't realize it...monopoly money! Every $1 bill has a unique serial number on it so even though there is nothing inherent that makes them different than any other dollar they at least have that one important attribute. If this weren't the case then you wouldn't be able to tell which $1 belongs to who when exchanging them with someone else.
Because of this, it's possible for companies or individuals to track ownership of all their coins and assets using blockchain technology and decentralized networks like Ethereum or Bitcoin Cash. This represents a new paradigm shift for entire economies and financial markets because it means they can be free from censorship, fraud, or interference by authorities.
Poolside Puffers are an example of non-fungible tokens that are used on the SmarBch blockchain. Even though each one is unique they are interchangeable with other Puffer since they rely exclusively on their unique DNA sequence to denote ownership which makes them fungible tokens.
Non-Fungible Tokens Within The Cryptocurrency Landscape
So what does this mean for cryptocurrencies like Bitcoin, Bitcoin Cash, and Ethereum? Well, firstly please do not take anything I say as investment advice and do your own research before making any decisions related to cryptocurrencies or initial coin offerings (ICOs). Secondly, blockchains themselves are not one-size-fits-all and there may be better solutions for certain purposes.
NFTs can therefore provide a specific solution to those wishing to track ownership of digital assets, collectibles, or even financial instruments because they each have their own attributes that make them unique from other tokens. In order to take full advantage of the benefits that blockchains offer then it's possible that we will see a shift towards non-fungible tokens as opposed to fungible ones.
Summary:
It's possible to prove that you own specific items or digital assets thanks to blockchain technology.
Fungible coins can be exchanged for non-fungible ones meaning blockchains have never been more flexible(Sell).
They offer a new solution for tracking and owning digital collectibles such as Pool Puffers.
If you enjoyed this article or learned something new, please don't forget to...
To learn more about NFT on SmartBCH- Checkout The Genesis of the SmartBCH NFT Universe
To Contribute to the Development of NFT Marketplace on SmartBCH - Bitcoin Cash Holders: Take the Next Step to Help Create an NFT Marketplace