In our NFT Crypto Beginners Guide, we will be explaining everything related to ERC-721 Tokens and how it Created Non-Fungible tokens. ERC-721 is a token standard for Non-Fungible tokens. It all started in 2017 when the NFT Crypto project Cryptokitties, a game on Ethereum blockchain became famous.
What Are Non-Fungible Tokens? What is A Non-Fungible Asset?
A Non-Fungible token is unique. They represent ownership of something unique and rare in nature. The NFT is not interchangeable and is opposite to other cryptocurrencies like bitcoin. NFTs are also called Nifty or Crypto Collectibles.
Non-Fungible tokens have similar information recorded in their smart contracts. Because of this feature, NFTs cannot be replaced by another token. You cannot swap two tokens among themselves, as no two tokens are similar.
Most of the Non-Fungible tokens are based on the Ethereum blockchain but some are also supported by other blockchains such as TRON and NEO.
Examples of Non-Fungible tokens are collectibles, game items, digital art, event tickets, domain names, and ownership records for physical assets.
Crypto Kitties collectibles are some of the first Non-Fungible tokens.
Non-Fungible assets have always been there, they are not new. Non-Fungible assets exists for few years slowly building and gaining market share. There is one thing common among all of them and that is they all can be taken away.
Fungible Vs Non-Fungible Tokens
In our NFT Crypto Beginners guide, to understand the difference between Fungible and Non-Fungible Tokens we are doing it with a table.
|Fungible tokens||Non-Fungible tokens|
|Fungible tokens are identical. Tokens of the same type are similar.||Non-Fungible Tokens are Unique. NFTs are different from one another.|
|Fungible tokens can be interchanged with another for the same value.||Non-Fungible tokens cannot be exchanged with another token for the same value.|
|You can divide fungible assets into smaller amounts. It does not matter which unit we use as long as it adds up to the same value||NFTs are non-divisible and not interchangeable.|
What Sets NFTs Apart From Cryptocurrency?
In our NFT Crypto BeginnersGuide, Bitcoin is a fungible asset because it can be paid back or replaced with a similar value. Non-Fungible tokens have the unique characteristic that set them apart from a cryptocurrency.
Non-Fungible tokens are unique. In ERC-721 tokens you cannot duplicate the tokens.NFTs have metadata that describes their uniqueness.
Non-Fungible tokens are rare. It is very scarce. There is not a fixed supply of the NFT Cryptoassets. Because of this scarcity, the value can go up very quickly.
You cannot divide Non-Fungible tokens into smaller denominations. You can only buy or sell it as a whole. For example, one cannot have 20%of a painting and 40% of a collectible item.
What Makes NFT Exciting To Use?
Non-Fungible tokens are becoming famous and are being considered the future of gaming, real estate, virtual assets, art, etc. the sale of NFT Cryptoin September 2020 went up to approx. million dollars in volume.
Absolute Ownership- No One Can Take It Away From You
Non-Fungible tokens cannot be taken away from you. Blockchain technology ensures your ownership. It also makes the movement of digital assets easier.
Easily Transferable – No One Sets The Rules For You
Non-Fungible tokens can be traded easily on specialist markets. NFTs solve the problem of ‘walled gardens’ in games. An item that can be used for a particular game can be used for a different title. You can even exchange it for a different item in a different game with a different publisher.
Fully Authentic – No Counterfeiting Possible
Major NFT Use Cases
According to our NFT crypto beginners guide, ways that a Non-Fungible token can be used are:
What Is The Role of NFT In Crypto Collectibles or Digital Collectibles?
You can create a completely new type of collectible like Cryptokitties. You can even buy the tokenized version of your favorite car or celebrity. These tokens are giving competition to the traditional collectibles like baseball cards, coins, stamps, etc.
What Is NFT In Gaming?
The problem that gamers face is that they are unable to sell rare weapons and skins as is currently prohibited. But NFTs allows gamers to use their assets in other games as well as the coveted items are transferable.
What NFT In Art?
It is difficult for a digital article to protect its copyright. NFT Crypto art makes it easier for them to create and showcase their art in a virtual space. This is made possible because blockchain offers proof of ownership. Artists can get better payments and also can start a revenue system with the additional payments.
How to Use NFT To Tokenize Real-World Assets?
This is an ongoing project. We are trying to tokenize real-world assets with NFTs. The recent development of tokenization is a way of owning real-world assets. Tokenization is a true evolution in which real-world assets get recognized by digital tokens that are on the blockchain.
Once the tokenization has taken place the tokens become digital stocks with undeniable proof of ownership. Tokenization is going to be a new way. A list of companies has already emerged in the field of asset tokenization.
These companies are developing tokenization platforms based on blockchain and smart contracts. They are trying to create solutions for all kinds of real-world assets. It includes everything from intellectual rights over collectibles to real estate. This makes it possible for anyone in the world to create and invest in the market.
These services of tokenization are not only focusing on the technical aspect but also the regulatory aspect of things. They want their customers to comply with the regulatory requirements when tokenizing any asset through their platform.
What Is The Role Of NFT In Identity Space?
NFTs are trying to digitize unique attributes like our appearance, our education, and medical history which is supposed to give us more control.
What Are Some Famous Non-Fungible Token Projects?
Non-Fungible tokens are mainly built on the Ethereum network. ERC-721 tokens were established on the Ethereum network as the non-fungible token standard. Thanks to Non-Fungible tokens the crypto community has created many amazing NFT Crypto projects like Cryptokitties, Decentraland, and many more.
It is the first fully decentralized game world. Decentraland was built on the ERC-20 token MANA. In this, the LAND ownership is stored on the Ethereum blockchain. You can create, experience, make money on the content and applications on the LAND using Decentraland’s SDK. You can spend MANA to buy goods, services, and virtual land.
LAND in Decentraland is owned by the community and they have full control over their creations.
Gods Unchained – Gaming Non-Fungible Token
Gods Unchained is a card game. This digital trading card game allows its users to have ownership of their collection. Users can play for free; they can play for keeps, or they can even do trading on open marketplaces.
Gods unchained is an Ethereum based game. It was the most popular NFT Crypto game before other blockchain games came into the picture. Gods unchained was developed by Immutable. It is an Australia based blockchain gaming startup.
In Goods Unchained, each collectible art is a non-fungible token. This helps the player in owning their in-game assets the same way one owns cryptocurrency.
Cryptokitties – Pioneer That Made NFT Mainstream
Axiom Zen develops Cryptokitties game. Cryptokitties are the first Non-Fungible tokens that skyrocket NFTs to the mainstream. It is also a game on the Ethereum network. Cryptokitties allows its players to purchase, collect, breed, and sell digital cats. You can breed or create your non-fungible animal friend.
MyCryptHeroes – Battle Game Using NFT On Ethereum Blockchain
The tokens that are to be stored on the blockchain can be used, treaded, and sold within the game.
OpenSea – Where Can I Sell NFT?
Open Sea is a virtual marketplace for digital goods. The NFT Crypto marketplace has collectibles, gaming items, art, and assets. They are all backed by blockchain technology. It is a marketplace where you have rare digital items and crypto-collectibles that can be exchanged peer-to-peer.
Rarible was the first community-owned marketplace. Here you can create and sell digital items that are secured by the blockchain. the users are awarded Rari tokens for buying and selling digital collectibles.
Public Trading Companies Experimenting NFT
With NFT Crypto becoming famous, many companies are trying to experiment with the Non-Fungible Token. These companies believe that the use of NFT Crypto will increase the consumer reach and in return will drive growth.
Ubisoft – Rabbids Token
Among many big game companies, Ubisoft is the one willing to experiment with blockchain. It has launched blockchain-based Rabbids which are digital collectibles. They want to raise money for the United Nations Children’s Fund(UNICEF) through this.
Ubisoft has its headquarters in Paris and is launching 55 Rabbids collectibles. Rabbids collectibles will be launched as tokens on the Ethereum blockchain. blockchain will verify the uniqueness of the digital assets, making them more of a collectible.
Nike – Patent On NFT Based Footwear
Nike was awarded a patent titled “System and method for providing cryptographically secured digital assets,” for footwear based on NFT. You can trade these digital shoes and even breed them. And it may turn into real-world shoes. It means that you can mint, exchange, and intermingle crypto assets in the form of digital shoes. These shoes can be linked to a real-world shoe.
Formula 1 – Animoca Brands NFT Partnership
The major player in the sports scene signed a licensing agreement with Animoca brands. In 2019 Animoca Brands Corporation secured a global licensing agreement with Formula 1. It was to develop and publish F1 Delta Time which is a blockchain game. The game is based on the famous racing series.
With this now the players can build their collection of NFTs like cars, car parts, and drivers in the Ethereum based network.
Samsung – Enjin NFT Storage
The tech giant has now introduced phones that have a pre-installed NFT crypto wallet known as Enjin. In 2019 the company announced support for Ethereum-based gaming-focused currency Enjin coin. You can store NFTs in Enjin.
The cryptocurrency wallet will allow users to store their virtual currencies. The pre-installed wallet comes as a cold wallet. It means that it doesn’t require an active internet connection to store and handle cryptocurrencies.
NBA & NFL – Panini NFT Partnership
NFT has partnered with a long-standing collectibles company known as Panini. Now you can buy cards featuring football and basketball players on the blockchain.
In 2019, Panini America which is the world’s largest licensed sports and entertainment collectibles company announced that it will introduce trading cards featuring blockchain technology. The trading cards will be sold in an auction format.
Each card is going to be unique that will include a blockchain digital asset, accompanied by a physical version. The physical version will have an autograph of the respective player and sometimes even memorabilia will be included too. The blockchain version will be the exact copy of the physical one.
Louis Vuitton – Ensuring Authenticity Through NFT
Luxury brands face the problem of counterfeiting. The customers always want proof of the brand’s authenticity. Now, these luxury brand products will be given NFTs which will help in verifying their authenticity.
What Is The Costliest NFT Sold So Far?
When we talk about the costliest NFT Crypto sold so far then Dragon the Cryptokitty comes to mind. It holds the record for the most expensive Non-Fungible token. But there have been others as well who have been playing the field.
The one that comes to mind is the F1 delta Time Apex Race Car “1-1-1”. Its value of 415.9 ETH, when converted in dollars, comes to $113,124 at the time. You can get an actual sports car for this amount of money. This is one of a kind digital formula1 race car. The car offers performance much superior to any other motor in the game. Because of this superior quality, it started a fierce bidding war.
Pros And Cons Of Non-Fungible Tokens (NFT)
|Pros of NFT Tokens||Cons Of NFT Tokens|
|NFTs can unlock new earnings streams in gaming, sports, art, and technology.||Building these decentralized apps for NFT can be tricky and time-consuming.|
|NFTs are capable of introducing millions of people to cryptocurrencies.||It needs a simpler structure to be able to be used by first-time users, who know nothing about blockchain.|
|NFTs can transform our outlook towards ownership. It can make it possible for us to own a real-world asset that’s far away from us.||Players buy an asset hoping that they will make a profit, but if the market collapses, they can make a bad loss as well.|
ERC-721 Tokens NFT – How Are ERC-721 Non-Fungible Tokens Made?
ERC-721 is a standard. Standard in the sense it is a template or format. Developers follow these standards to make the writing of code easy, predictable and reusable. ERC-721 is Ethereum’s non-fungible token standard. Non-fungible tokens can be created on other smart contracts. This can be done with the help of tools and the support of non-fungible tokens.
The first ERC-721 tokens specifications were proposed by Dieter Shirley. It came as an Ethereum improvement proposal(EIP). This process is used for introducing new standards to Ethereum. Anyone can go for an EIP, once it is accepted by the community then it becomes an ERC(Ethereum Request For Comments). ERC is a standard for Ethereum applications.
According to our NFT Crypto Beginners Guide, a token is a smart contract. You can also call it a piece of code that runs on the Ethereum network. The ERC-721 tokens are made when you write a piece of code. You use the smart contract programming language to write this code like Solidity. Solidity follows the basic template.
Once the basic template is done then you can decide the details about the token that you want to create. Details like name of the token, owner, symbols, etc. you can even put additional functionality in your NFT. But it will be interesting to see how your NFT is going to interact with other smart contracts.
ERC-721 is a free and open standard that describes how to build Non-Fungible tokens on the Ethereum blockchain. ERC-721 Tokens are all unique
How Do I Get NFT Tokens For Free?
In our NFT Crypto Beginners Guide, we will discuss how you can get NFT for free.
Well! You can’t. There are three ways in which you can acquire NFTs. They are:
- Acquiring NFTs from playing a game or when you interact with a dApp.
- You can purchase NFTs from marketplaces.
- Have an NFT traded to you by someone else
All the ways to acquire NFTs are paid ways to get it. So, no you cannot own NFT for free.
Non-fungible tokens are not traded on standard cryptocurrency exchanges. You can only sell or buy them on marketplaces like OpenSea or Decentraland etc.
How Do I Buy NFT Tokens?
For NFTs there are many marketplaces from where you can browse and buy, here is a list of such places:
- OpenSea: This is one of the largest marketplaces for buying NFTs. OpenSea is like eBay for NFTs. It allows you to buy or purchase anything and everything. It includes ENS names, Cryptokitties, Axis, and many more.
- Rarible: This is another popular marketplace that is similar to OpenSea. Rarible is powered by its Token RARI which is decentralized. On Rarible users receive RARI tokens for purchasing NFTs.
- The Nifty Gateway: It was founded by Duncan and Griffin Cockfoster in 2018. On this platform, you can buy the most trending games and decentralized apps. Some of them are Cryptokitties, Gods Unchained, Decentraland, etc. On the nifty gateway, you can buy the hottest NFT Crypto games. It allows users to use their fiat money, which makes it available for non-crypto users.
- Somnium space: on Somnium space you will be able to buy and sell land, create digital assets and make money on the assets. This space is free on stream and is compatible with VR headsets.
How Do I Sell NFTs?
Our NFT Crypto Beginners Guide will tell you how you can sell your NFTs. You can sell your NFTs on open Marketplaces like OpenSea and Rarible. They make it easier for NFT Crypto to be put across the ecosystem for sale.OpenSea is very useful for auction formats.
For selling your NFT Crypto, you will connect your Ethereum wallet to the choice of your platform.
If you have already created the NFT, then you will be able to see a “sell” prompt. You need to click on it and sign a transaction to complete. You can follow the same process if you have collected someone else’s NFT and want to sell it. Just follow the instructions and click on sell and voila!!
Let’s discuss the Frequently asked questions in our NFT Crypto Beginners Guide.
Is NFT A Digital Asset?
According to our NFT Crypto Beginners Guide, NFT is a digital asset. It is quite new in terms of the digital asset. NFTs are designed to represent ownership of things that are unique and scarce. It can be anything from tokenized physical assets, rare digital resources, shares.
Because of NFT’s uniqueness where no two are similar. They cannot be replaced with another identical token. Smart contracts prevent duplication while publicly visible blockchains make them scarce.
Non-Fungible Tokens are indivisible and unique digital assets. A digital asset is those which represent anything that you can save on a blockchain. This you can see with many use cases like in-game, digital trading cards, digital collectibles, and many more.
Non-Fungible tokens let new types of collectibles and infrastructure for blockchain-based unique items. With Non-Fungible Tokens, you can digitize ownership of any arbitrary data.
NFT (Digital Asset) creates unique items that you cannot destroy, replicate or duplicate. You can track NFTs on the blockchain. A digital asset can be traded or exchanged back to traditional money.
What Is A Famous Example For A Non-Fungible Token?
Famous examples of NFTs in our NFT Crypto Beginners Guide includes:
- Topps” Garbage Pail Kids” – these are trading cards. They are the classic collectible since the 1980s.
- William Shatner – He is a legendary star trek actor. He released memorabilia to the public as trading cards.
- Blockchain Heroes– This is an original trading card series. It features the likeness of personalities in the NFT Crypto and blockchain space.
- Prospectors- It is a famous blockchain-based game. In this game the players earn NFTs. These NFTs are based on their gameplay which in return help improve their in-game performance.
- Cryptokitties – This was the NFT series that made NFTs popular. Today they are the most recognizable names in the NFT Crypto world.
How Do NFTs Work?
There are many frameworks to create and issue NFTs, but according to our NFT Crypto Beginners Guide, The most used one of these is the ERC-721 token. It is a standard for issuing and trading on Non-Fungible assets. The issuing and trading of NFTs with the help of ERC-721 tokens happens on the Ethereum blockchain.
Recently, one more standard came into the picture. That is ERC-115 which enables a single contract to have both Fungible and Non-Fungible tokens. by allowing this ERC-115 has opened up a wide range of possibilities.
The standardization of the NFTs issuance is going to allow a higher degree of interoperability. This will eventually benefit the users. It simply means that you can transfer unique assets between different applications.
You can trade your NFTs in open marketplaces like OpenSea. In these markets, the buyers are connected with the sellers. The value of each token is unique. NFTs prices depend on the market’s supply and demand.
You will think how such a thing can hold any value. In the case of NFT Crypto, the value is not inherent to the object but is decided by the people for whom it’s valuable. In the case of NFTs value is a shared belief. It has value because people think it has.
Non-fungible tokens with their smart contracts enable detailed properties to be added. These properties can be anything like the identity of the owner, rich metadata, or secure file links.
Takeway – NFT Crypto Beginners Guide
A Non-Fungible token is unique and is not replicable.
- Non-fungible assets have been with us in the form of Twitter handle, registered copyright, etc.
- Fungible tokens are different from Non-Fungible tokens. Fungible tokens are identical, can be interchanged and divisible whereas Non-Fungible Tokens are unique. Cannot be interchanged and indivisible.
- The NFT Crypto gives you complete ownership that is transferable and authentic.
- The Non-Fungible tokens can be used in gaming, art, digital collectibles, identity space, and others.
- Many public trading companies are coming into the NFT Crypto world like Nike, Samsung, Ubisoft, and others.
- F1 Delta Time Apex Race Car”1-1-1” has been the costliest NFT sold so far.
- NFTs have their advantages and disadvantages.
- There are several marketplaces where you can buy and sell your Non-Fungible Tokens.
- NFT is a digital asset.
- Tokenization of real-world assets is possible by using NFT.
- Non-Fungible tokens are created with the help of ERC-721 tokens.