Get Started with NFT(Non Fungible Token) — Blockchain Roadmap
Unique tokens (NFTs) are assets that represent unique tangible and intangible items in a wide range of uses, from sports trading cards (NBA) to virtual real estate and even digital sneakers.
The verifiable feature, that is, the ability to distinguish it from copies of the original product, is just one of the most important factors in the preference and popularity of NFT.
NFTs are not a type of asset that can be directly exchanged with each other, unlike regular cryptocurrencies.
Indivisibility
Unique tokens cannot be traded as 0.50 BTC or 0.333 ETH like Bitcoin or other cryptocurrencies and can be sold or bought at a 1:1 ratio as an NFT product is not divisible in reciprocal transfers.
Unique Structure
Think about going to a sports event or there is a very popular rock band, they want to buy tickets to their concert. Just as tickets purchased for both cases are special in their properties, NFTs are also unique, meaning they cannot be exchanged for each other.
Variability (in value, popularity, and time)
Let’s consider a band. It can also be seen that they made a lot of noise in certain periods, but they lost their popularity over time. The same is true for NFTs. For example, while the value of an item is 0.1 ETH in 2021, this value may correspond to 670 ETH in 2024.
Irrevocability
Two ERC-721 tokens of the same type cannot be exchanged. This process is possible in theory, but in practice, they are not completely interchangeable. Because the metadata will not be the same with each other.
interoperability
Non-fungible token standards allow NFTs to be easily transported and included in multiple ecosystems. For this reason, NFTs are proving to be interoperable.
Tradability
The most compelling feature of interoperability is free trade in open markets. For the first time, users can move their items outside of their original environment to a market where they can take advantage of advanced trading features such as eBay-style auctions, bidding, bidding (such as an Enjin-produced NFT being put up for sale on OpenSea), and exchange in stablecoins or application-specific currencies. can perform sales transactions.
In particular, this represents for game developers to switch their assets from a trading closed economy to a free market economy. From this point of view, we can say that a great revolution has already started for the game industry and it has no intention of stopping.
Liquidity
Non-fungiable tokens can be traded instantly after minting, which will lead to higher liquidity.
NFT markets will create liquidity pools based on auction, just like in DeFi liquidity pools, and in return for the value here, people will be able to receive fungible tokens by donating NFT tokens, and vice versa. NFT markets can appeal to a range of audiences, from tight traders to more novice players, allowing for greater exposure of assets to a wider pool of buyers.
Similar to the birth of a new asset class driven by liquid tokens at the time of the 2017 ICO boom, NFTs continue to expand the market for unique digital assets.
Immutability and demonstrable scarcity (resilient to change and determinable in supply at the time of creation)
Smart contracts allow developers to set fixed limits on the unique token issuance and enforce permanent features that cannot be changed after NFTs are issued.
With this; For example, a developer could programmatically require that only a certain number of certain rare items be created, while keeping the supply of more common items endless.
It is particularly appropriate for items such as original artworks, as developers cannot change the properties of products and the predetermined number of offerings over time, thanks to the immutable nature of the blockchain.
Programmability
Like traditional digital assets, NFTs are fully programmable. For example, in CryptoKitties, the ancestor of NFTs, you could raise and mature digital cats through design mechanisms such as feeding them baked cookies.
Most of today’s NFTs have more complex mechanics such as forging, machining, monetization, random generation. In my opinion, the Design space of NFTs is potentially infinite.
Over time, developers have created common, reusable, inheritable standards for all fungible tokens by representing non-fungible tokens on public blockchains. These; ownership, transfer, and simple access controls.
These principles or protocols are similar to the HTTP protocol sending requests between two devices when it is desired to display images in JPEG or PNG formats between two different machines. In short, HTML/CSS technologies can be thought of as displaying the content on the website and performing various operations during the day.
Blockchains add a layer of storage of primitives and their metadata that provide developers with a whole new set of stateful information on which to build applications. This area is called blockchain standards (supporting stateful data storage and logical operations).
For Ethereum, a token is virtual storage or representation of any asset on Ethereum or other blockchains.
Reputation scores on online platforms
Player’s abilities in a game
Fiat/fiat currency such as USD
Admittedly, each of these examples has different scenario rules. There are token standards with predetermined code rules designed according to these differences.
ERC-20 (standard token)
It provides a standard for exchangeable tokens, in other words, they have a property that makes each token exactly the same (in terms of type and value) as any other token.
ERC-20 (Ethereum Request for Comments 20), proposed by Fabian Vogelsteller in 2015, is the token standard that implements an API for tokens in smart contracts.
1 ETH is always equal to 1 ETH and swapping each other will not lead to a change in value and type; It proves that ETH is an ERC-20 token.
ERC-721 (Non-fungible token standard)
It is a type of token that provides a standard for NFT. In other words, such tokens are unique and may have a different value from another token in the same smart contract. ERC-721 tokens; they may differ according to their age, rarity, and even their visual appearance.
ERC-721 (Ethereum Request for Comments 721), proposed by William Entriken, Dieter Shirley, Jacob Evans, Nastassia Sachs in January 2018, is a non-fungible token standard that implements an API for tokens in smart contracts.
When the ERC-721 feature was first invented before Ethereum was born, it was wanted to be added to the Bitcoin world in matters such as the certification of real estate and assets other than Bitcoin, but it actually came to life with Ethereum because it could not become successful and stable.
ERC-1155 (multiple token standards)
We can say that this protocol was created for the game world. It is a relatively new token standard to other tokens that feature both tokens.
It is also known as the ERC-1155 multi-token standard, created on June 17, 2018, by Witek Radomski, Andrew Cooke, Philippe Castonguay, James Therien, Eric Binet, Ronan Sandford. They can also be called semi-fungible tokens.
ERC-1155 allows trading an infinite number of both exchangeable and immutable tokens in a single smart contract.
This standard, which allows the management of fungal, semi-fungible, and non-fungible tokens, is designed to prevent bottlenecks in future transfers.
Thus, different types of token types are collected in only one transaction instead of many transactions, allowing different types of items to be transferred with faster, cheaper, and lighter transactions (within the scope of the data size area it covers in the block).
They use metadata to acquire properties of objects or entities from an external location outside of the contract.
These are the coded data in JSON format that enable us to visually present the unique features of the digitally stored assets on the platforms and to gain the acquisition of these items and to gain the defining features of the ERC-721 NFT.
JSON is not stored inside the Ethereum contract. Because it is very expensive in terms of cost. Instead, the URI (Universal Resource Identifier) indicating where the user’s token-related metadata can find the JSON description is stored in String type.
This information is pulled through the API and we are provided with information about the features of the products on NFT platforms.
When you implement your contract, we need a way to make each item appear properly, for example, in OpenSea. This is where off-chain metadata comes into play. There are many things you can do with metadata: sorting, raising prices, animations, date information, etc.
Including the metadata of the assets allows applications such as OpenSea to pull rich data for digital assets and display them easily within the application.
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