NFT technology and real-world lands
The concept of NFTs has revolutionized the world of blockchain and digital currency. Now let us understand the meaning of non-equivalent tokens (non-commutative or commutable). NFTs are a special concept that even Vitalik Buterin, the genius of the crypto world and the mastermind behind the Ethereum development team, could not foresee. He admitted that he was well aware of the emergence of DeFi and longed for such a concept, but he could not imagine NFTs or non-metaphorical tokens.
Today, NFTs are being used more and more every day, and their prevalence goes beyond the world of digital currencies. For example, non-symbolic tokens are an integral part of the metaverse concept that will shape the future of our digital world. In addition to introducing an international decentralized monetary system through the purchase of digital currencies, the main outcome of the emergence of the world’s first cryptocurrency, Bitcoin, was the world’s adoption of blockchain technology. Their uses are different. The NFT concept is tied to the blockchain, and the creation of unequal tokens is a technology attribute.
NFTs are difficult for many people to understand, even those who have been buying and selling NFTs for months or years. The concept of non-metaphorical tokens allows us to map parts of the real world into the digital world and replicate them. In mathematics, mapping refers to connections between different objects or structures. NFTs grew and grew from the idea of digitally mapping the real world. Do not worry! If this explanation is confusing, this article will try to explain the non-figurative tokens in simple terms instead of using complex words and explanations. First, let us look at the reason for its name. NFT tokens are completely unique and have their own characteristics, unlike any other token.
For this reason, we refer to NFTs as non-equivalent tokens. In English, NFT stands for Non-Fungible Token. A fungible token is placed before the NFT. There is no difference between them, so they are interchangeable. The next part of this article will explore this concept in more detail. The application range of NFT is very wide. Non-equivalent tokens are used in games, digital identities, licenses, and certificates, especially in art. In addition to them, it is worth mentioning specifically the metaverse, of which NFT tokens are an inseparable part. Remember, non-symbolic tokens have endless uses as they are a means of mapping (connecting) the physical world to the digital world.
The concept of NFTs or NFT tokens in simple language
NFTs are cryptographic tokens on the blockchain and are associated with unique assets. In the field of digital currency, we divide cryptocurrencies into two categories: coins and tokens. A coin is a virtual currency with its own blockchain, like Bitcoin, and a token is a digital currency that runs on another blockchain, like Shibaino. NFTs, or non-equivalent tokens, are also a type of token and are created on the blockchain. We said that each NFT is associated with a unique asset. This can be a physical and tangible object in the real world or something in the virtual and digital world. For example, digital artwork (such as those designed using Photoshop) or physical paintings may be sold in the form of non-virtual tokens or NFTs. The main difference between non-equivalent tokens and digital currency tokens is that they are not interchangeable. This unique property of each NFT makes it useful for use as proof of authenticity and ownership in the digital world. Consider the following example to understand the meaning of non-equivalent and non-exchangeable NFT tokens.
In contrast to NFTs, regular token compatibility means that each unit (each token) does not differ from each other and thus can be exchanged for another unit. For example, the Shiba digital currency network has about 500 trillion tokens. Someone sent 5 million SHIB tokens to a person, and from that person, he received 5 million SHIB tokens; none of you are harmed or benefited. All his Shiba tokens are fungible, but non-fungible tokens or his NFTs are not. This is true for all digital currencies, whether coins, tokens, or Bitcoin. In a real-world example, you receive a bill for 5,000 $ from one person and pass another bill for 5,000 $. Even if the banknotes have different serial numbers, there is no difference between them. This function is essential for an asset to be used for exchange, and money must be fungible.
But NFT refers to a specific thing with a different identity. For this reason, one non-symbolic token or NFT cannot be exchanged for another token. Remember that impossibility of replacement does not mean technical and system impossibility.
Characteristics of NFTs
Non-coin tokens are unique due to their special features, characteristics, and significant differences from other digital currencies and tokens. They are considered a new step in the advancement of blockchain technology. These features allow you to use your NFTs in blockchain games, transform artwork into valid and verifiable digital files, and enable metaverse events. A little while ago, there was a concert in one of the metaverses with tickets on sale at NFT. Some platforms even allow you to convert your physical artwork into a digital file and use an encrypted hash code to prove it is yours.
Legality
Before the invention of NFTs, digital artists struggled to prove they owned their assets, allowing anyone to copy their work and store it on their device easily. I was. But thanks to non-token tokens, he can create artwork on one of the supported blockchains and use its hashcode to prove the artwork’s owner. This feature makes it easier for artists to operate legally. Differences between non-physical tokens (NFTs) and digital currencies
Cryptocurrencies are mostly token tokens by traditional standards, which is very different from his NFTs as non-token tokens. Simply put, a token is like a cryptocurrency that can be placed in exchange for another token of its category. For example, each BTC unit is exactly the same and interchangeable with another BTC. The same applies to ETH coins; each unit can be exchanged for another ETH. Traditional currencies also fall into this category. The 10,000 $ note is no different in value from other 10,000 $ notes. As a result, the ownership of each currency unit does not belong to any one person, which also improves the security and liquidity of the payment network. However, unequal tokens are made to be clean and distinguishable from each other. For this reason, even if his NFT were made in exchange for a painting of the Mona Lisa, it would not be confused with his NFT of a painting made by a 5-year-old.
How non-factory tokens (NFTs) work.
Similar to creating new digital currencies (in the form of tokens that do not require a dedicated blockchain), creating NFTs is easy today, thanks to multiple protocols. There are several standards for this purpose; one of the most widely used is the ERC721 standard for generating unequal NFT tokens. ERC721 is the standard for building NFTs on the Ethereum blockchain. It is not bad to know that Ethereum is considered the most widely used platform for regular cryptocurrency tokens. Therefore, a significant portion of the current multi-billion dollar market capitalization cryptocurrency is the Ethereum token. The standard for most of them is ERC20. ERC1155 is an improved version of ERC721 for making NFTs. Its unique feature is to provide the ability to store virtual and non-virtual tokens in smart contracts. Thanks to this so-called multi-token standard, users, especially developers, have many options at their disposal. By creating non-equivalent, he NFT tokens using standards, we offer users a high level of interoperability, allowing them to transfer their own assets between different applications.
NFTs are considered and stored as part of the blockchain, an attractive database for use in financial systems because they are “immutable.” Take Ethereum as an example. Numerous protocols and platforms have been created to build his NFTs on the blockchain of this massive ecosystem. Now, when you create an unequal token on any of them, his NFT token is stored on the Ethereum blockchain. Each NFT contains certain distinct characteristics that distinguish it from other NFTs. So why not just build NFTs on Ethereum? This work requires some programming knowledge and knowledge of how smart contracts work, but a special platform for this work acts as an intermediary between the user and the Ethereum blockchain with just a few clicks. Create a unique token. Each NFT has a unique address on the blockchain, so like tokens (traditional digital currencies), you need a wallet like TrustVault to store them. The new version of TrustVault has split the main page into two parts, with a separate section for NFT maintenance and management. Non-fungible tokens may not be duplicated or transferred without the permission of their owner, even by the original creator. This functionality is achieved by using blockchain to create non-federal tokens or NFTs. This makes NFTs ideal for displaying and proving digital or physical asset ownership.
NFTs can be sold (transferred). Similar to digital currency tokens, NFT tokens can also be bought and sold. Like virtual tokens, non-virtual tokens are priced based on supply and demand or other similar factors. As mentioned earlier, calling an NFT irreplaceable does not mean it is technically impossible, but common sense does not allow it. You can send someone a token and get another token, you send one Bitcoin unit, and from that person, you receive one. But each NFT is unique and therefore has a different value. Several markets have been set up to buy and sell NFTs, of which OpenSea is the largest in terms of the trading volume. Here you can own any NFT by paying the listed price. Different digital currencies are used as means of payment, depending on the platform and blockchain on which the marketplace is built. For example, OpenC, a platform built on Ethereum, uses ETH, the native digital currency of its ecosystem, to display the price of each token. Marketplaces like OpenC connect buyers and sellers. NFT sellers may be the creators themselves or have purchased the NFT from someone else. As expected, the uniqueness of each token makes its price different from others.
What are NFTs worth? Considering the multi-million prices of some non-symbolic tokens, such as regular avatar purchases and the first tweets of the social network Twitter, the pricing mechanism of each NFT has been questioned by many. The value of each unique token is determined based on multiple criteria, especially supply and demand, and the price is fully negotiable. Neither the buyer nor the seller is obligated to buy or sell at a particular price. If there is demand, we could sell his multi-million dollar Photoshopped NFTs.
Like many expensive (tangible) things in the real world, they have no inherent value and are often determined by those who deem them valuable. In reality, values are shared beliefs. Have you ever been surprised to find an ordinary painting at an astronomical price? The designer’s charming personality or something has made this work worth seeing by many. This is also true for NFTs that are bought and sold at space prices. The first message posted on Twitter, perhaps because of its uniqueness, has become so valuable to the hundreds of millions of people interested in the platform that someone could sell his NFT at auction for 2.5 million. I decided to sell it for dollars. Of course, if the current owner does not propose such a price, this unique token will eventually be sold at a much lower price — an opportunity to sell this NFT at a higher price if desired.
Applications of NFTs
According to the definition of a non-symbolic token, it can be used in any field or industry. Any physical or digital object can be associated with an NFT and stored on the blockchain. As the first use of NFTs, we should mention the creation of unique digital items and cryptocurrency collectibles in decentralized applications. Note that blockchain and crypto games also belong to the category of decentralized applications. NFTs in games
The gambling economy is not new; even without blockchain, most online games have had their own economy for years. However, by using blockchain, we can tokenize the assets of these games. Thanks to this event, the gaming industry will take a few steps forward and completely change. The concept of non-virtual tokens (NFTs) could help eliminate or at least ameliorate the common problem of inflation that many games currently suffer from.
As mentioned earlier, NFTs can be used in any industry or space, but the current focus is on using them to transform the gaming industry. There are harsh realities in the world of video games that cannot be denied. Players spend hundreds of dollars to buy in-game assets, spend countless hours manipulating them, and end up owning nothing. For example, even if you play a particular game for hundreds of hours and get the perfect weapon, you do not actually own that weapon and cannot sell it. This process changes with the tokenization of in-game objects using NFTs. A great platform was designed precisely to allow game creation to tokenize all kinds of objects. For example, we should mention Gala Games. It aims to bring back creative thinking to players with the ability to control games and special in-game assets.
Dynamic NFT Tokens
Non-Symbolic Tokens (NFTs) are manufactured in two general types: static and dynamic. A static NFT is essentially a fixed, immutable design where the metadata does not change. These NFTs are built with smart contracts that are immutable and non-interactive. Use of this type of NFT is limited to a profile picture or license to operate in a specific club (e.g., Board IP Yacht Club NFT). Of course, there are other uses for this type of NFT, but the inability to change the metadata limits the possible uses for this type.
On the other hand, the dynamic class of NFT contains modifiable attributes and information. This type of NFT is mainly used in blockchain games, and the NFT needs to be updated and leveled up after some time. To do this, you need to change the NFT’s metadata. This, by its very nature, cannot be changed. Because in order for an artist to sell his work, he has to make sure that no one can copy and resell it. Dynamic NFTs, however, are designed to use fluid smart contracts to obtain information from off-chain and on-chain oracles and use it in NFT metadata. Connecting NFT and the world of art
After games, NFTs are most commonly used in the art world. Artists can buy and sell their works in the form of tokens. As mentioned above, their artwork is either digital (musical works or photographs) or physical (paintings or crafts). When it comes to physical works, the ownership argument is understandable. Anyone who has her NFT associated with the work owns it. Nevertheless, things get a little more complicated when it comes to digital work. Cannot copy photos or music? How is this copy different from the original? Remember, ownership is covered in another article. Outside the NFT space, people copy other people’s artwork but end up being prosecuted. For example, the right to use a tokenized NFT photo of her on a social media profile would be prosecuted if you did not own it. Of course, you can make screenshots or regular saves of artwork worth millions of dollars on the OpenSea marketplace or any other proprietary token trading marketplace, but what you have is not the original work. It differs. Someone might try to look like a famous artist’s work in the real world, but that is about it.
Non-Identical Tokens and Digital IDs
One of the most commonly used NFT cases is the issue of digital identities. Given the nature of blockchain databases, storing identity and ownership information via NFTs improves privacy and security. Unlike Bitcoin and Ethereum, blockchains are not necessarily public and not all of these databases are visible to everyone. When it comes to digital identities, the importance of this technology lies in the immutability of the data, which cannot be changed once registered. The discussion of the use of non-equivalent tokens in the field of digital identities is extensive, and his two previous sections, namely the use of NFTs in the gambling industry and the world of art, are also considered part of it. NFTs are like cars, paintings, or houses tokenized so that they can be visualized in a virtual world and stored in an immutable database. Despite this widespread use, NFTs are currently mostly used in the gaming industry and the art world. The strong connection between the Metaverse concept and NFT
Metaverse is not a new word or concept. In 1992, Neal Stephenson first used the metaverse in his book Snow Crash, describing it as his 3D virtual world made up of avatars of real people. His first strong metaverse project, Second Life, was released in 2003, six years before Bitcoin came along. In the last three years, two metaverses based on blockchain and NFT Decentraland and Sandbox have emerged. However, in November 1400, news of Facebook’s decision to rebrand itself as Meta and focus on the Metaverse space put a lot of attention in that direction.
Bound by the notion of non-metaphorical tokens, the metaverse can be seen as a combination of virtual reality, augmented reality, and the Internet, which in the distant future will replace the Internet as we currently use it and is seen as a world with the ability to interact at the highest possible level, unlike the usual 3D virtual environment. However, what is the relationship between NFTs and the Metaverse? In the Metaverse world, non-symbolic tokens or NFTs are used to identify and separate different elements. For example, in Decentraland and Sandbox, you can buy land, build houses, build swords, home decorations, and more. Each of them maps to an NFT and is different from the others. The same functionality allows you to buy and sell assets within the metaverse. There were no ownership issues. No one was willing to pay hundreds of thousands of dollars to buy land in Decentraland or Sandbox.
The future of the NFT field
NFTs were a new revolution in the crypto world that enabled and legalized the ownership of digital assets and works. As Web3 becomes more popular, the use of NFTs will definitely increase, as the future of media, payments, and decentralized interactions will depend on his NFTs and the next generation of platforms that rely on this industry to cater to people. Built from scratch. You will be able to own your property and take and manage NFTs were initially developed to prove ownership of digital art, but the potential was so great that they quickly found their rightful place. Developers are currently designing a structure that will allow NFT holders to own assets, conduct transactions, and use their NFTs as digital identities in the metaverse. Considering all these positive points and potential future applications, the future of the crypto space and Web 3 seems to go hand in hand with NFTs.
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