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What are Non-Fungible Tokens (NFTs)?
Briefly summarised, Non-Fungible tokens (NFT) are tokens that are unique and cannot be replaced with something else. This might sound abstract, but NFTs are the perfect fit for digital collectibles, art, luxury goods, and all sorts of other physical and digital products that can be verified on the blockchain.
Though, it’s much more than that! There are, for example, projects that enable companies to issue their event/festival tickets as NFTs or certificates of authenticity that are issued on the blockchain.
In a time where it’s difficult for artists to make money, NFTs have enabled plenty of artists who understood the value to grab this opportunity early and earn a lot of money by creating their digital art or proof-of-ownership for physical creations.
What are NFTs used for?
NFTs are created using smart contracts. The NFT community initially started to create their tokens on the Ethereum Network, as it’s the largest blockchain to offer smart contracts and is most trusted by the cryptocurrency community.
There are, however, discussions among the different communities where concerns are expressed for smaller networks. Their gas fees are lower, but various community members warn for the potential risk of these networks failing, leaving you empty-handed.
So far the main use case of NFTs is to create and collect collectibles. For example, Beeple, a well-known artist, managed to sell one of his digital pieces for a whopping $69M USD back in March.
There is also NBA Top Shot, where users can collect over 10 million different Top Shot Moments. These are short video fragments of special moments during basketball games.
Another extraordinary NFT use case is Ens.Domains, where users can register names such as 420.ETH (owned by me, Marco) to store all of my addresses, receive any cryptocurrency, token, or NFT in one address. Rather than having to share my long 0xd34123412… address, I can simply share 420.ETH with people and enable them to send me these above-mentioned assets in a much simpler way. Ens Domains is already supported by over 200 different platforms and wallets, including Coinbase, Huobi, Etherscan, Uniswap, and many other applications.