We observe many new trends emerging in the sphere of cryptocurrencies. Some of them pass, other stays permanently. Recent months have seen a flood of new NFT-based projects. What are non-fungible tokens and what kind of a revolution are they bringing to the crypto world?
Power of uniqueness — What are NFT tokens?
Non-fungible tokens (NFT) are a special type of cryptographic assets based on blockchain technology. What distinguishes them from typical cryptocurrencies and tokens on the market is that they are, as the name suggests, non-fungible. This means that each of them represents a one-of-a-kind, unique value that is different from any other token. In the case of coins and fungible tokens, a bitcoin in one wallet has the same value and characteristics as a bitcoin in another wallet. They can be exchanged 1: 1 and it will not make any difference for the owners of both of them.
This makes the NFT tokens unique. Their supply is extremely limited, and that creates a kind of scarcity, thanks to which they can reach very high valuations.
Authenticity confirmed — What is so special about NFT?
The technology behind the NFT tokens provides the ability to secure the ownership or authenticity of a digital or physical (in the case of Uniqly.io) object, thus protecting its value. In the age of the Internet, it is very easy to duplicate something and distribute it unlawfully, thus depriving the rightful author of benefits. Counterfeiting of goods secured by the NFT is impossible, because even if the content itself is copied, its authenticity can be verified within seconds. Thanks to this solution, rare, exclusive or collectable items secured by NFT can retain their unquestionable authenticity and value.
Why are they different? — Features of NFT tokens
We already know that NFTs are non-replaceable, unique, and rare. But what else can distinguish them from ordinary tokens known to us? There are several such features, but the main ones are indivisibility, indestructibility and verifiability.
· Indivisibility means that the token cannot be divided into its smaller pieces (after the decimal point). In cryptocurrencies, we are used to dividing into very small, even millionth parts. This is impossible in the case of NFT.
· Indestructibility is a feature that guarantees the constant preservation of value and function of the token. Such tokens cannot be destroyed, deleted or replicated. For the owner, this means that the value held in the token cannot be lost. NFT may, however, be burned under special conditions.
· Verifiability of NFT consists in the possibility of checking the history of a given token through a blockchain explorer. It is possible to verify the various stages of token ownership back to the original creator, which may prove its authenticity.
How to ensure non-fungibility? — Token standards
Everyone who is into cryptocurrencies probably knows about the ERC-20 standard. Tokens of this type are the most common of all digital assets. However, they are fungible, so it was necessary to create a different type, based on a different mechanic. In the case of Ethereum network, these are:
• ERC721 — a standard that supports only NFT tokens in which each individual token is a completely separate entity, based on a separate smart contract. This is the first NFT solution, but its application on a large scale can be troublesome because it requires a huge number of processes to integrate them in a given ecosystem;
• ERC1155 — a modern standard where one smart contract is able to create an infinite number of non-fungible tokens as well as fungible ones. Their creator is the Enjin gaming platform, which supports over 40 games using a single smart contract, producing, so far, about 60 million individual NFTs. ERC1155 tokens are easy to implement and have multiple functions that make it easier to use them.
Cats are just the beginning — History of NFT
The first project based on ERC721 tokens was CryptoPunks. However, the real madness started in 2017, when CryptoKitties, a game created by Dapper Labs studio, consisting of breeding virtual, funny cats, got extremely popular. The cats were completely unique, algorithmically generated, with different visual features. Trading unique digital pets has flourished so much that it has clogged the Ethereum network and has led to a gigantic increase in transaction fees. Since then, many projects have been created to duplicate or improve this scheme. We trade NFT based on memes, digital trading cards, virtual works of art or even virtual lands.
What’s coming to the NFT market? — The Future
Until now, the NFT market did not seem too serious. Cats, memes, gifs, unique characters have a price, but does that mean they have value? Not exactly. Another development of NFT is the translation of their value directly from physical objects, where the token will serve only as a representation of the product on the blockchain. It will definitely bring a breath of fresh air to the world of NFTs, and at the same time prove that NFTs are a real financial revolution. Projects like this are now starting to emerge, pioneered by Uniqly.io
About Uniqly.io
Uniqly.io — the first marketplace and escrow that allows you to create and trade NFT tokens with the possibility of materializing them in the real world.
Uniqly.io is a Marketplace and Escrow.
Marketplace — We allow our users to trade NFT tokens backed by real-world items. Anyone will be able to create their own unique landing page and list their products created in our generator, or deposited via escrow.
Escrow — We have created a solution that allows you to easily trade all physical products, even those that were not created in our Generator, including clothing, works of art, collectibles, and more.
Materialize and stake NFT tokens.
Materialize NFT — Uniqly.io brings you the possibility to materialize your favorite NFT tokens from outside of our ecosystem, such as Cryptopunks, Hashmasks, SuperRare, and many, many more!
Stake NFT — Some limited NFT collections will be available in exchange for freezing UNIQ tokens for an appropriate period of time, in cooperation with other projects we will create additional mining pools.
