The world is changing, and so are the ways in which we trade. The newest trend to hit the market is called non-fungible tokens or NFTs.
This type of token has a lot of advantages that make it more desirable than other types of cryptocurrency. In this article, you will learn what an NFT is, where it came from and why you should care about them.
What are NFTs?
Non-fungible tokens or NFTs are new types of cryptocurrencies that give you ownership over digital assets.
There’s no need for centralized verification; these items can be verified on the blockchain ledger by anyone who has access to it which makes them easier to trade without barriers restricting their use like those found in traditional markets such as stocks and bonds trading.
This gives people back control of their personal data.
History of Non-Fungible Tokens
This is an interesting one! Non-fungible tokens have been around since 1980!
A cryptographer and artist named David R. McIntee created it to be used in a game called Creatures which was released in 1991 by his company, Creature Labs.
Creatures is an online virtual pet simulator where you can create your own unique creature and take care of them just like you would a traditional animal at home (except that they’re digital). This popularized the use of NFTs and people began calling this initial coin offering “cryptokitties.”
However, as time went on more companies started adopting NFT technology such as Decentraland which offers users ownership over virtual pieces of land in their world with features similar to Second Life or Minecraft.
The hope is that as more companies adopt NFTs, it will create a new way of thinking about digital ownership.
The Different types of Non-Fungible Tokens & Their Uses
NFTs come in many different forms. As mentioned before, there are tokens that allow you to own a digital creature, like the popular game Creatures and Decentraland’s virtual land.
There is also an NFT called CryptoPunks which allows users to collect unique cartoon characters with various attributes such as hair color or gender.
The potential for these types of coins can be very effective when it comes to improving how companies handle their data by storing customer information on a token instead of one server alone.
This makes it so if anything happens to the company they won’t lose all their valuable data because each person has their own copy stored safely on their device through this kind of tech.
One example where this was used effectively was by Arcades.
Arcades was a company that allowed people to buy and sell used video games, consoles and various other gaming-related products.
The blockchain technology they utilized for their inventory led them to have one of the most successful launches in recent memory when they went live back in 2010 with over 200 million dollars worth of transactions processed on day one without any major problems.
This is because each transaction was recorded as an unchangeable record stored securely on the Ethereum blockchain which meant no employee could alter or erase it.
Almost every single interaction Arcades had with its customers happened transparently through this system including all sales, trades and payments were logged within minutes of being made instead of having to wait days for clearance like many other retail companies still have to do today.
What’s the difference between NFTs and fungible tokens like Bitcoin or Ethereum?
NFTs are not like Bitcoin or Ethereum which can be traded for other tokens on the market. All NFTs are unique and each one is different from any others, meaning they cannot be replicated or copied so it’s impossible to counterfeit them.
In order for an NFT to work, you need a “root” token that was minted by the creator of the game itself in order to use their specific currency within their own game world- similar to how Monopoly has monopoly money but digital games might have ERC20 tokens as well.
This means if your account gets hacked then all your items will also get stolen with it – so please make sure you keep track of your password!
Aside from that, even though people speculate on NFTs, they do not do it in the same way as with traditional cryptocurrencies which are traded heavily and quickly on exchanges by investors, funds or cryptocurrency trading bots.
What is the process for making one?
To create a non-fungible token, you do not need to have any technical knowledge. There are quite a number and user-friendly NFT marketplaces such as Rarible or Mintable where you can create NFTs for your artwork quickly.
To create an NFT, you first must connect a crypto-wallet to an NFT marketplace of your choice.
The wallet address is your login information, so you won’t need to share anything else.
You’ll find a ‘Create’ section. There, you can upload your artwork to mint a new NFT, and complete the process.
Where can you buy non-fungible tokens today?
There are many places where you can buy NFTs. Such as on the aforementioned OpenSea, Rarible or Mintable. You can also buy them on a marketplace such as RareBits.
There are many more sites which sell these tokens but you should not have any trouble finding somewhere to start your search!
Security and Privacy Concerns with NFTs
NFTs are not really a security concern. The key issue with NFTs is that they can be counterfeited, which means the ownership of an item could easily be contested by someone else who has minted another copy.
And, of course, with anything that is ‘trending’, there are scammers popping up left and right. So always be cautious and read up before making any kind of purchase or sale.
The only privacy concerns to keep in mind when using non-fungible tokens is you should never use more than one wallet address for any specific account or asset. Furthermore, if you do have multiple wallets linked up to your accounts and assets then make sure you regularly monitor them all so nothing gets out of hand!
The Future of Blockchain Technology – what’s next for NFTs?
NFTs have only been around for a short time yet they’ve already become so popular that there are now several working blockchain platforms which specialize in them. Experts predict the NFT market to be worth about $150 billion by 2024, and some even believe it could reach as high as $700 billion!
The future of NFTs is bright regardless if you’re an investor or not. There’s no question these tokens will continue gaining value. At this point we can only speculate what the next few years might bring but I’m sure it’ll be exciting either way!
We hope that this blog post has been helpful in explaining everything you need to know about NFTs, from the history of them to how they work and where people can buy their own.
If you’ve never bought an NFT before or created your own, we encourage you to do so as soon as possible! In addition to these great benefits, there are some potential privacy concerns with using an NFT that every consumer should be aware of.
What other questions do you have?
Leave a comment below for us and our team will get back to help answer any queries you might have on the topic!