When you think of cryptocurrency, the first thing that likely comes to mind is bitcoin. Bitcoin, along with several other cryptocurrencies in today’s market, is a fungible token. That means any one bitcoin is equal in value and function to any other bitcoin. This same concept can be applied to any fungible token, such as Ethereum.
What makes a non-fungible token different from a fungible one is that each non-fungible token is unique and can have a different value from another of its kind.
Here are six factors to know when creating an NFT:
- Decentralize Everything
In the nft creators world, everything from item ownership to content essentially becomes decentralized. This is especially important because a lot of the information on the internet isn’t readily accessible to everyone. With a non-fungible token, this information can be open and more easily disseminated across different mediums.
- Prove Authenticity and Ownership
Two factors that come with NFTs are authenticity and ownership. Because each NFT is tracked in a public ledger, it’s much easier to prove the authenticity of an article through how it’s tagged and traced back to its original owner than when using traditional mediums such as email, documents, and physical paperwork.
- The Possibilities Are Endless
NFTs can be applied to a variety of different situations. As the technology is still relatively new, there hasn’t been widespread use for non-fungible tokens yet, meaning this list could continue growing as more applications are discovered. Using blockchain technology through NFTs provides cryptocurrencies with more security, making it harder for hackers to infiltrate systems or accounts. Furthermore, having a digital token makes it easier and more efficient to update passwords securely and quickly than traditional password authentication methods because there is no need for resetting the password when things like email addresses or usernames change.
Digital Assets, or Dapps, are known as apps that run on a peer-to-peer network. They’re typically distributed in decentralized formats and utilize open-source code to avoid monopolizing the market and power structure. These sorts of applications also operate autonomously and work without any single entity controlling them. Dapps work especially well with NFTs because the former cuts down on fees and helps to make transactions more affordable.
- They’re Not Just Digital Items
One of the most popular applications for non-fungible tokens is gaming and eSports, but this type of token can be applied to many different venues and situations. For example, Reuters has a program building non-fungible tokens to help authenticate photographs and protect digital images from being copied.
- The Future of NFTs
There is no denying it: as cryptocurrencies continue to take more of the market share, tokens such as NFTs will also be rising in popularity. The number of applications for NFTs will only continue growing as time goes on because this technology has so much potential. The question isn’t whether NFTs will become a large part of the industry but when they will be implemented and how soon it will happen.
In conclusion, non-fungible tokens are already proving to be beneficial in many different industries, but they’re especially helpful in the blockchain and cryptocurrency world.