What is NFT?

 What is NFT?Simply put, non-fungible tokens, also known as NFTs, are proprietary digital assets. Therefore, no irreplaceable token is the same. Let's explain it this way, when we send 1 BTC to the user and receive 1 BTC, nothing changes for us. That's because every coin is the same, which makes it a fungible digital asset. NFTs are like Leonardo da Vinci's Mona Lisa. It's unique and that's what makes it valuable. There are no other paintings in the world.

Likewise, each NFT stores some form of metadata, making it a unique entry on the blockchain. That said, even NFTs on similar blockchains are not interchangeable.

How does a unique cryptocurrency empower its owner?

NFTs come with a mechanism to store rich metadata that goes beyond token symbols, supply, names and balances. It also stores asset and ownership details. Therefore, owners and future buyers are guaranteed a provenance.

NFTs became the talk of the town in 2017 with the release of CryptoKitties.

What is the value of NFTs?

To answer this question, let's take a look at the development of NFTs.

Attempts to create NFTs on the blockchain began back in 2013 when Color Coin was built on Bitcoin. However, the first technical standard for NFTs emerged in 2017. Its name is ERC721. That is, it is not the same as ERC20. This is because ERC721 tracks the ownership and movement of individual tokens. This is what makes non-fungible tokens unique and valuable.

The cat breeding game CryptoKittes is the first successful implementation of ERC721. Therefore, each ERC721 represents a unique digital kitten. The most expensive CryptoKitty traded at $172,625 in 2017 (600 ETH at the time).

This is when big giants like Google Ventures are aware of the power of NFTs.

Recently, a blockchain startup, Enjin, partnered with Microsoft to create a crypto collectible called Microsoft Azure Heroes. We will use it as an example to illustrate how NFTs work in the real world.

In the real world, NFTs have some extremely potential use cases in art, antiques, vintage, property ownership, and more. There are a number of main reasons why gaming became the first industry to push for the actual implementation of NFTs. That's because the stakes are low and gamers are already familiar with the concept of digital collectibles.

Future iterations of NFTs will likely link physical assets to these cryptocurrencies to enable trustless transfers in the real world. As an example, identification certificates and software licenses can be traded as NFTs.

Many projects are already proposing better NFT standards such as ERC115, ERC875 and ERC998.

Features that highlight non-fungible tokens:

• They are exclusive to the owner.

• They are not interchangeable with another identical NFT;

• Each NFT has its unique characteristics;

• Each NFT represents ownership, rights and privileges;

• NFTs are indivisible.

How NFTs work

NFTs can work in a number of ways. Here, we'll use an example of the latest digital collectibles from Microsoft. Many developers are using the Microsoft Azure platform. Now, they can win digital collectibles on the blockchain.

A total of five badges have been developed by Enjin and are powered by the blockchain. Each badge will be available in limited quantities and will be awarded to individuals who make valuable contributions to the Azure platform.

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