Steemit Crypto Academy Contest / S2W4 - What are NFTs. by @lebey1

2개월 전

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Introduction

This article will explore Nonfungible Tokens (NFTs) technology and applications. NFTs, or nonfungible tokens, are unique kinds of digital assets that can be transferred from one person to another. They're similar to regular cryptocurrencies like Bitcoin and Ethereum because they're a form of exchangeable value. But unlike traditional cryptocurrency assets, NFTs are unique in their own way: they can be owned by multiple people at once while maintaining different values for each owner.

The benefit of using NFTs is that it gives us more options than just knowing that something exists on the blockchain; we can also see what it looks like and where it came from (if we want). To understand why this matters, let's take a look at how this would work with physical objects instead. In that regard, a quick history of how NFT came into place will be discussed next.

History

The first NFT was a digital art piece by artist, and programmer Eric Smith called "This is a Drill." He released it on the Ethereum blockchain in 2014. It was a series of images that could be purchased using cryptocurrencies, with each image featuring an individual pixel in an image. The sale of these pixels raised $1 million for charity. It showcased how blockchain technology could be used to create unique digital assets that were not only scarce but also transferable across different platforms.

Following Smith's work came CryptoKitties; a collectible game where players buy and raise virtual cats with unique attributes, which they can trade and breed with other players online. This game went viral shortly after its launch in December 2017 due to its popularity among millennials who grew up playing Pokemon or Tamagotchi (another popular 1990s collectible). The popularity of CryptoKitties proved how much people enjoy collecting rare items and acquiring new experiences through gaming platforms; it also showed how quickly NFTs could become profitable businesses.

Difference between fungible and non-fungible tokens

NFTs are unique, meaning that each one is different. This is in contrast to fungible tokens, which are interchangeable and equivalent to one another. Unlike fungible tokens, NFTs have a unique identifier and URL.

Non-Fungible Tokens (NFTs)Fungible Tokens
NFT tokens are built using the ERC721 StandardFungible tokens are built using the ERC 20 Standard
In NFTs, each token has a unique ID and value propositionTokens that are Fungible are in uniformity unlike NFTs
NFT are distinct assets that cannot be traded for another NFT of the same sort and are not fungibleTokens that may be traded for other assets of a similar type or another asset of equal or more excellent value are said to be fungible.
NFT are assets that cannot be split into smaller pieces; they represent a whole companyTokens that are fungible are assets that may be divided into any number of pieces while maintaining the same value.

The article will further look to answer all the questions asked by the @ in the contest announcement post

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Are NFTs interchangeable? What are the differences between an NFT and other currencies? Is there an NFT marketplace? And how to invest in NFTs?

This section will further explain the following topics from the header.

NFTs are interchangeable. It is one of their unique features that makes them different from Fungible Tokens. NFT can be changed to cryptocurrencies such as Ethereum, USDT, Polygon, BNB, and a whole host of other coins on which the NFT is been built on their blockchain.

Also, NFT is quite different from other currencies. The differences are highlighted below:

  • NFTs can be used to represent digital assets or even physical objects.
  • They are unique and cannot be duplicated.
  • A central authority doesn't control NFTs.
  • NFTs aren't fungible; in other words, each one is different from the others. For instance, you can own one token of an NFT called "Lion Mane" and another person might own another token of the same NFT called "Lion Mane 2". These two tokens are not interchangeable with each other because they do not share the same characteristics (i.e., they don't look exactly alike). This makes NFTs similar to traditional collectibles like baseball cards or baseball jerseys in this way: each item has its own history and value associated with it that can change over time depending on how much people want it!
  • NFTs may not necessarily be digital (they could also exist as something physical like an art piece). However, they still have value because they're rarer than most things out there right now, which means fewer people have access to them, so demand tends to stay high for more extended periods before supply catches up again."

With the growth and popularity of NFTs among crypto enthusiasts, a lot of market NFTs market places have sprung up within the space of a year since NFT's popularity in 2021. Some of the NFTs Market place popular used are itemized below:

  • OpenSea
  • Rarible
  • Axie Marketplace
  • Binance NFT marketplace
  • Nifty Gateway
  • Decentraland
  • Crypto.com
  • SuperRare

Investing in NFT is quite a risky game just like crypto itself. Investing is easy as it requires one to buy an NFT from a marketplace with an acceptable cryptocurrency. Once an NFT is bought from the Marketplace and it will be kept in a private wallet and to be sold at a later date. NFTs can be sold either through Bids or by placing a value on the NFTs

How to create a new NFT and is it possible to have an NFT stolen? And why use a distributed file system like IPFS in this area?

How to create a new NFT

The advancement in the NFT sector has made it resulted in lots of platforms helping out to create an NFT. They are lots of ways in which NFTs could be created however the basis as to which NFT is to be created follows the itemized list below:

  • Picking an item to convert to an NFT. It could be a painting, picture, art, tweet, meme, or even video collectibles. The keynote to this is that the NFT creator must have the intellectual right to these items before choosing to turn them into an NFT.

  • Pick a blockchain in which you want to set up this NFT and after that, create a digital wallet with some funds to be used as a gas fee

  • Select an NFT Market place you want to sell your NFT and upload your file. PS: Most NFT markets have their guilds on how to convert the digital file of your pictures, arts, and painting into a Marketable NFT.

  • Lastly, the NFT creator should set up how they want to sell their NFT in the NFT marketplace.

is it possible to have an NFT stolen?

Sure, it is very possible for an NFT to be stolen if a hacker gets access to the digital wallet where the NFT is stored. Unfortunately, there is no way to back up your digital asset since it's stored on another person's computer. If they lose their device or delete the software, your pet will be lost forever!

And why use a distributed file system like IPFS in this area?

Let's start with knowing what an IPFS is, IPFS in full means InterPlanetary File System. It is a protocol that many NFTs (or non-fungible tokens) point to as their underlying asset. It’s part of the backbone of this new digital economy. The IPFS are important as they make NFTs built on the blockchain stay that way.

non-fungible-token-g380d91af4_1280.png

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How are NFTs used in art, video games and collectible card games? And how are NFTs revolutionizing property titles?

How are NFTs used in art, video games, and collectible card games?

We all know that NFTs are digital arts for short and despite this, the gaming sector has really incorporated its use greatly. NFTs are basically used to reward users or players of a Video game. To explain further, They are Video games that reward the users who play the game of a particular project, it is popularly called play to earn. You play a game and after each mission, you earn an NFT.

Another way in which NFTs is been used is that while playing a video game, the collectibles in which a player can acquire as been programmed to be NFTs. This way, players can earn NFT for their activities within the game.

And how are NFTs revolutionizing property titles?

NFTs can also be used to represent ownership of real-world property. For example, NFTs could represent ownership of a piece of art or a license for a song. To do this, an artist or songwriter would need to create an NFT by creating a smart contract on the blockchain that contains information about their work and what rights they're offering.

We're already seeing this being done with music rights management; artists are selling digital licenses for their songs through platforms like Ujo Music, which allow users to purchase licenses directly from the artist and avoid middlemen like Spotify or Apple Music; and receive royalties every time someone listens to their songs online.

By transferring ownership via these tokenized assets instead of just sending money back and forth between buyers and sellers, we can reduce friction in the market while allowing creators more control over how their work is monetized.

How are NFTs regulated? And what are the solutions to the limits of NFT development?

How are NFTs regulated?

We all know that cryptocurrency is unregulated and NFTs fall into that same category also. As of the time of writing, there is no regulatory body overseeing NFTs. Also, NFTs are not regulated by the SEC, CFTC, IRS, or any Government or agencies

What are the solutions to the limits of NFT development?

There are several ways to address these limits.
To increase the number of NFTs: You can do this by creating new games that support NFTs, or by using existing games as platforms for developing new games. For example, if you create a game such as a casino game that lets people buy NFT in-game and then sell them on the market, then your users will be able to generate revenue from their in-game profits. This means that they won't necessarily have to sell anything on the marketplace but can instead keep everything for themselves!

Also, NFTs require the use of gas fees to place an NFT in a marketplace. Ethereum remains the biggest blockchain where NFT is been created and this means that listing your NFT, will require the use of eth as a gas fee. The high cost of using eth as a gas fee makes it quite hard for people to list their art.

Conclusion

We hope this article has given you a good introduction to nonfungible tokens. The subject is complex, but we think it's one that deserves greater attention and understanding. As the technology behind NFTs continues to evolve with the support of many talented developers and innovators, it surely will. We can only wait and see how things change for the better in the world of finance. In the meantime, consider your own needs for asset management and whether or not NFTs might be able to make your life easier too! All in all, though, there's an exciting future ahead for everyone involved in this area

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Also, NFTs require the use of gas fees to place an NFT in a marketplace. Ethereum remains the biggest blockchain where NFT is been created and this means that listing your NFT, will require the use of eth as a gas fee. The high cost of using eth as a gas fee makes it quite hard for people to list their art.

I hope that in the future NFT will get a positive response just like other cryptocurrencies.

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well NFT are the main drivers in the crypto world as of now

they can be owned by multiple people at once while maintaining different values for each owner.

Each NFT that you see is unique in its own way. Sometimes 2 NFTs might look alike but on the blockchain each one of them has its own unique owner.

An NFT is owned by a single user at a time. But the creator of an NFT always gets something when his creation is sold by another even after he or she doesn’t own it anymore.

Following Smith's work came CryptoKitties; a collectible game where players buy and raise virtual cats

If not for this post I would have never know that smith was the first ever to create an nft. The cryptokitties gaiend so much popularity that at one point in time I thought it was the first ever nft.

They are unique and cannot be duplicated

Yes, this is because each nft is unique. No matter the number. And as soon as it is created , it is stored permanently on the blockchain and each time ownership is transferred the blockchain records it.

Sure, it is very possible for an NFT to be stolen if a hacker gets access to the digital wallet where the NFT is stored

Unfortunately NFTs seem to be more vulnerable to attacks than cryptocurrency. In a space of about a week you can hear of multiple cases. But the good thing about this is that immediately it is stolen, it’s sale can be frozen.

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I am glad that you went through the lines of my post. I feel this will keep me on my feet to write better. Thank you for stopping by

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You are welcome buddy

This is a very good entry you have made.
NFTs are very unique tokens indeed. Your post is an inspiration and a motivation to me.

Thanks for your enlightening post you share here. Have a great contest outing.

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Glad that you took one or two notes from the post

One thing I have learned from this is how IPFS works. It is similar to the centralized cloud system, just that it doesn't have a centralized storage system.

NFTs are the way forward for artists who have been crying about the lack of copyright for their artworks.

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I am still learning what IPFS is

Thank you, @lebey1 for publishing an article in the Steemit Crypto Academy community today. We have accessed your article and we present the result of the assessment below.

Criteria Remark
Verified user
#steemexclusive
Free of Plagiarism
#Club club5050
Bot free

Comment/Recommendation

  • You used generalities to define non-fungible tokens: NFTs on the other hand you need to simplify the terms in your own words, as you briefly compared fungible versus non-fungible tokens.

NFTs are interchangeable. It is one of their unique features that makes them different from Fungible Tokens. NFT can be changed to cryptocurrencies such as Ethereum, USDT...

  • No, each non-fungible token acts as a kind of certificate of authenticity, showing that a digital asset is unique and not interchangeable.

  • You have not shown how to invest in NFTs.

  • You briefly listed the steps of creating a new token showing that it is possible to hack it, but the part about using distributed file system like IPFS in this area was superficially explained.

  • You briefly show how NFTs are used in art, video games, and collectible card games, but you overlooked how NFTs are revolutionizing titles.

  • Regarding the last question, you showed the lack of regulation in the field of NFT, by proposing clear and convincing solutions.

Rating

Total| 5/10

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I would say that I disagree with the rating @kouba01 . True, I may not have explained all the concepts asked from the questions but the ones i did answer, I think I did great on them.

NFT has really taken video gaming to another level. Play to earn is an amazing innovation.

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i agree

amazing, you gave me a lot of knowledge

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Thank you for stopping by

Very nice way you did this post of yours today. After reading your post, I thought it was a very informative post. And NFT is becoming very popular day by day. Different people are creating some NFT art with their creativity, and uploading these for sale in NFT Marketplace. This NFT market I think will be much bigger in the future.

You are such an awesome author friend

We all know that cryptocurrency is unregulated and NFTs fall into that same category also.

Yes this true man, NFTs are really not regulated by any body or Andy one that's why it's so so lovely, and this is because is created on a Blockchain which runs on a Decentralized systems.

Thanks for sharing

Wishing you success

You have done a good work be giving a good definition of NFT, and also differentiating NFTs from other currencies.

Also, NFTs require the use of gas fees to place an NFT in a marketplace. Ethereum remains the biggest blockchain where NFT is been created and this means that listing your NFT, will require the use of eth as a gas fee. The high cost of using eth as a gas fee makes it quite hard for people to list their art.

You have given a good solution to the limit of the development of NFTs, and i believe NFTs will reach a greater height with the solution you provided. Wish you success in this contest