What are NON Fungible Tokens?
Non fungible tokens are a type of digital asset that is unique and non-interchangeable. They are different from other types of blockchain assets because they have some properties similar to physical objects. These digital assets cannot be substituted for one another, which means there can only be one copy in existence at any time. This article will go over how non fungible tokens work, their advantages over traditional cryptocurrencies, and the future of non fungible token technology.
There are many use cases for non fungible tokens due to their ability to track ownership authenticity by verifying its genuineness on the blockchain instead of depending on third parties like banks or financial institutions . For example, if an artist creates a piece with original art using Ethereum’s non fungible tokens, they can track and verify its authenticity.
This allows the creator to determine where their artwork has been displayed or transferred over time by simply scanning the blockchain through distributed ledger technology (DLT). This example is just one of many possible non fungible use cases, however there are some disadvantages to NFT including transaction fees associated with each transfer of ownership which could get expensive depending on how often you want to trade your non fungible token.
How Is an NFT Different from Cryptocurrency?
Non fungible tokens are similar to cryptocurrencies because they can be traded with others on a blockchain. They also have the ability to power smart contracts, which is another similarity non fungible tokens share with traditional cryptocurrencies like Bitcoin and Ethereum . However non fungible tokens differ from other digital assets because of their unique characteristics that allow them to track ownership authenticity over time instead of being tied down by third party institutions or intermediaries.
What’s Next for NFT?
While non fungible token technology has been around since 2014, it’s just recently starting to gain more attention in 2019 due to its use cases when combined with Blockchain technology. The future looks bright for non fungible tokens as we will start seeing more widespread usage in many different industries. For example, non fungible tokens are being used in the video game industry to allow gamers to purchase digital assets that can be traded between users on blockchain markets.
There are also non fungible token startups using this technology for blockchain-based art galleries where artists can sell their work online and buyers can track ownership authenticity directly from the artist’s website . While there is still a lot of hype surrounding non fungible tokens at the moment, it will take some time before we see widespread adoption for these types of decentralized applications (dapps).
How to buy/sell NFTs
Non fungible tokens can be bought and sold through cryptocurrency exchanges like Binance or EtherDelta. You’ll first need to purchase a non fungible token from an exchange before you actually own it, which is different than how purchases work with cryptocurrencies where the actual transaction takes place on the blockchain itself. While non fungible tokens are similar to other digital assets because of their ability to power smart contracts that perform transactions within dapps, there’s no way for users to directly trade non fungible tokens between each other without going through a third party service such as Coinbase .