New Technologies which revolutionize commerce are famous for creating great wealth for those that monetize it. Those that recognize something’s potential frequently are the early adopters and may profit the most. A new development on Steem-Engine, the side chain on the Steem blockchain is non-fungible Tokens, which are also called NFT’s. NFT’s are a completely different type of token from Bitcoin, Steem, or any other Altcoin. Bitcoin, Steem, or any other Altcoins are technically known as fungible tokens. That word Fungible means that each Bitcoin is worth the same as any other and they are interchangeable, just like you and I can exchange dollars we have in our wallets, because they are interchangeable or the same. Non-fungible Tokens or NFT’s are different, in that each is created to be unique, to represent something unique. They can describe an entire object or a specific piece. For example an NFT could represent your entire body or a piece of it, like your right arm or left leg. The NFT for your arm would differ from the one for your leg and they would not be interchangeable, just like your arm and your leg are not interchangeable.
As you may know, non-fungible Tokens, which by definition are non-interchangeable and unique, are used in the very popular decentralized gaming application called Splinterlands. This is a playing card game similar to the Pokémon Cards, but different in that Splinterlands are digital representations, which are unique. If you own a certain card, which represents a certain character in the game you change your card by addicting things like skills, armor, weapons, and these characteristics have skill levels which can be increased. This process creates a unique card and it is represented by a non-fungible Token. You made your card and the character on it unique. The non-fungible Token contains all the information about your card and the Token represents your card. This means your card or it’s Token is an item of value, which can be traded for something else of value at an exchange instantaneously for Bitcoin or an Altcoin like Ether, Litecoin or Steem. These cards always existed in the digital realm, as computer code, but it’s only recently that they became non-fungible. This has created the possibility to sell, exchange or lease these Tokens, thus new decentralized applications or businesses were born, which facilitate buying, selling or renting these playing cards. I think it’s valuable to understand how a tool which has monetized this game can monetize other things.
If you read my article on arbitrage, you remember how I explained that by creating a general or abstract example to explain something, it makes it easier to utilize the concept to monetize other things. The data properties for Splinterlands cards are the card type, rarity, level, edition (Alpha, Beta, Promo, Reward, or Untamed), and the data properties distinguish the cards from each other. Non-fungible Tokens are encoded with the data properties these cards possess and these properties make both the cards and coins unique. But the tokens become representative of the cards and exchanging the tokens becomes the same as exchanging the tokens. If you break this process down to its components we have; first someone obtains control of a card A, at cost X and they can convey or give control of that card A to someone else for cost Y, and the difference in cost between X and Y is their profit. Now that’s the underlying concept, profit made on the difference. The details involved are obtaining, preparing the cards for exchange and safely exchanging them. The purpose of this post is to point out that there are other things of value, which people obtain control over for cost X and then convey control to someone else for cost Y and profit from the difference. These things include physical assets like rare coins, antiques, real estate properties and other unique physical items.
So now imagine, that instead of selling your car, house or piece of art using a broker, you sell them on an exchange developed specifically for those items. The objects of value are represented by non fungible tokens and they are exchanged as quickly and as easily as you buy Bitcoin. In a trustless fashion through computers and smart contracts. If you can visualize this, and understand it, you have seen the future of digital commerce. The details by which these are represented by non-fungible tokens and are exchanged by smart contracts has been worked out by a few platforms in the cryptocurrency world and Steem is one of them.
This is the future, Steem is there now.
“Steem, it’s where the ball is going”
Stay thirsty for knowledge my friends.
✍️ written by Shortsegments
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