Non-Fungible Token
An introduction to NFTs as blockchain-secured tokens that represent unique ownership of digital or real-world assets, including their history and importance.
NFT stands for Non-Fungible Token. Each NFT is a representation of ownership over a unique, authentic piece of digital property, or even real-life asset. These tokens exist on and are secured by a blockchain so as to be resilient against theft or copy attempts.
Where Did NFTs Come From
The first NFT, that anyone knows about, was created in 2014 by Kevin McCoy and Anil Dash. It was called Quantum and was a video of Kevin’s wife, which was registered and sold on the Namecoin blockchain. Since then, there have been two key components to all NFTs. One is a blockchain to reside on, and the other is their intrinsic property, their non-fungibility.
Non-Fungibility
While there are highly fungible cryptos like Bitcoin (meaning every Bitcoin shares the exact same properties as any other Bitcoin and can therefore be traded 1 for 1), there are no two NFTs that are exact equals of another. Even if 100% of one NFTs’ contents are copied into another it will never be original.
Because each NFT is unique, they are often used to create ownership of digital assets and collectible items. Every NFT is tradable in a NFT marketplace where brands and fans come to buy and sell their art, assets, digital property, etc.
In fact, a Non-Fungible Token can be a photo, painting, image, gif, video, piece of music, meme, or really any digital piece you have intellectual property rights to. They can be used to hold ownership of real estate (both digital and physical). Brands like Fayre are working to ‘tokenize’ real life objects so that brands can sell merchandise directly connected to NFTs, for example.
Aside from their technological properties, NFTs draw value from association to an artist, the scarce communities they reside in, as well as any artistic qualities they may contain.
NFTs and Blockchains
Minting NFTs requires a blockchain with a specific framework. Ethereum is the most widely used blockchain for NFTs thanks to the [ERC-721](https://academy.binance.com/en/glossary/erc-721) standard used for issuing and trading non-fungible tokens. Ethereum has also developed another standard which allows a single contract to manage both fungible and non-fungible tokens called [ERC-1155](https://eips.ethereum.org/EIPS/eip-1155).
The NFT minting process on Ethereum requires an investment of roughly 0.6ETH or $250USD. Other common blockchains used for NFTs are Polygon and BSC, Fayre uses both.
NFTs are a driving force for the adoption of blockchain technologies in growing digital economies. They have the potential to be used in any industry that can benefit from frictionless transfers of ownership for goods, identity protection, personalized certifications, and integrity of information.
Why NFTs are Important
Aside from being fun, exciting and alluring works of wonder, the technology behind NFTs is revolutionary. Blockchain technology could very well be a prominent driving force in our future, and NFTs may even be adopted in things like Web3 and the Metaverse for the purpose of trustless transactions and smoother trading around the world.