So, what the heck is an NFT?
What does NFT mean?
There's a lot of noise out there in the massive cryptocurrency space. A lot of that noise is centered around "metaverse" and NFTs. Despite seeing numerous posts and articles trying to explain NFTs, I felt like I should give everyone a refresher. From the perspective of someone who creates, collects, and trades them.
So starting from the very basic question - What does NFT stand for? NFT stands for Non-Fungible Token. Ok, so what is a Non-Fungible Token? A non-fungible token is a digital asset similar to any cryptocurrency but one major difference is that 1 NFT is not the same as any other NFT.
For example: Bill has 1 USD and trades that 1 USD for another 1 USD bill. Bill still has the same 1 USD because dollar bills are fungible. This means that 1 USD bill and another 1 USD bill are the same. On the other side of that - Bill has 1 NFT from collection X and trades it for another similar NFT from collection X. Bill now has a totally new asset, even though the NFTs may look similar on the surface.
This is because NFTs are not interchangeable like the USD bill is.
What makes an NFT unique?
Now that we understand that these digital assets are not interchangeable, let's look at exactly why. Take a look at the 2 NFTs above side by side. These are 2 identical NFTs from a game that I have been playing with called Zombie Outbreak Survival that uses NFTs for items. These both may be Chips, but because they are digital assets on the blockchain, they will have different data stored inside them. Look at the top right corner of each and you will see that one is #18267 and one is #18268. They are not the same. Get it?
Despite being similar and serving the same purpose inside the game, these 2 NFTs are different when it comes to the data stored on the blockchain. In the game itself, that doesn't matter at all because they literally do the same. I was just trying to drive the non-interchangeable point home.
I hope I did that in a way that was easy to understand. This is a for dummies post, after all. I'd like to add, also, that I'm no expert. I've just been around for a while.
NFTs come in a lot of different flavors.
Not only can NFTs live on different blockchains like Hive, Ethereum, BNB Chain, Polygon, WAX, and many more... But they also come in a lot of different flavors and can serve a lot of different purposes. A lot of people have this common misconception that NFTs are just digital art or collectibles. This is not at all the case.
The NFT technology is pretty incredible and can serve a lot of different purposes but because humans are generally awful... The concept devolved into ugly monkey profile pictures and who could sell a drawing for more money. I have nothing against digital art being sold as NFTs, but I do have a problem with how it has become the default use-case (or lack there of) for the technology.
I already gave you an example of one of the many ways that this technology can be used above - gaming. If you can't tell by now, I'm a hardcore nerd. I love video games, especially when I can earn something from playing them. Take Splinterlands or Gods Unchained for example. These are 2 games that you can play right now for free and earn NFTs and cryptocurrency.
All of the assets that exist within these 2 games are NFTs that live on different blockchains. This gives the players true ownership of the assets. There's no creating fake assets or cheating because it's all verifiable on the blockchain.
What about other flavors?
Gaming is just one of the many ways that NFTs can be used to give the user true ownership. Another great example is using them for music. Instead of releasing a song on a major streaming platform only to get your income eaten up by distributors and such... You could mint the song as an NFT and sell your own copies of the song directly to the consumer. This cuts out the middleman that takes a cut and allows the artist to connect with the fans.
These could simply be animations with the MP3 file attached, or even music videos. Some differences could be - instead of just being able to listen to the song, the holder of the NFT could get a discount on merch for example. That NFT is a receipt of digital ownership which can be verified in the holder's wallet. This could also serve for the purpose of airdrops.
Maybe the artist wants to reward fans who purchased the NFT of their song, they could instantly send another asset to their wallet. Instead of doing sketchy non-transparent giveaways on Twitter, the artist could interact with those that purchased directly, and in a transparent way. Maybe even airdropping tickets to a concert to holders.
Starting to see some utility other than stupid drawings?
This post is getting a little lengthy and I have so much more to say. Maybe I'll do a series of posts for this. Shoutout to whoever it was that suggested doing NFT content to start with (drop a comment, I can't remember lol).
Thanks for stopping by. Let's continue the discussion in the comments and get engaged.
Don't forget to scoop your LBI tokens on Hive Engine for easy passive income.
Post written by: @l337m45732 aka NiftyPhill
P.S. Thanks @forexbrokr for the SEO suggestions :)
Posted Using LeoFinance Beta