Non-fungible token

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A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens that are fungible in nature.[1]

Applications[edit]

Non-fungible tokens are used to create verifiable digital scarcity. NFTs are used in several specific applications that require unique digital items like crypto-collectibles and crypto-gaming. Popular blockchain games like CryptoKitties make use of non-fungible tokens on the Ethereum blockchain.[2] NFTs are used to represent in-game assets, which are in control of the user instead of the game developer.[3] NFTs also find potential use in digital art, by helping prove authenticity and ownership.[4]

Implementation[edit]

The Ethereum community has adopted the ERC-721[5][6] protocol as a standard for Non-Fungible Tokens on Ethereum. Projects like CryptoKitties, CryptoPunks,[6] and Decentraland[7] follow the ERC-721 protocol for their NFTs.

Growth and mainstream appeal[edit]

Non-fungible tokens made their way into mainstream news when CryptoKitties went viral [8][9] and subsequently raised a $12.5 million investment.[10] RareBits, a Non-Fungible Token marketplace and exchange, raised a $6 million investment.[11] OpenSea, a Y-Combinator backed NFT marketplace raised $2 million in its seed round.[12] Gamedex, a collectible cards game platform made possible by Non-Fungible Tokens, raised a $800,000 seed round.[13] Decentraland, a blockchain-based virtual world, raised $26 million in an initial coin offering,[14] and had a $20 million internal economy as of September 2018.[15] NFT standards could also allow users to transfer in-game items from one game to another.[16]

References[edit]

  1. ^ Schroeder, Stan. "Crypto trading card game 'Gods Unchained' looks pretty sweet in first gameplay trailer". Mashable. Retrieved 2018-11-18.
  2. ^ Wong, Joon Ian. "The ethereum world is now obsessed with breeding cartoon cats". Quartz. Retrieved 2018-05-02.
  3. ^ "CryptoKitties shows everything can — and will — be tokenized". VentureBeat. 2017-12-04. Retrieved 2018-05-02.
  4. ^ "The Art World Needs Blockchain – Irish Tech News". irishtechnews.ie. Retrieved 2018-05-02.
  5. ^ "ethereum/EIPs". GitHub. Retrieved 2018-05-02.
  6. ^ a b "Crypto Collectables? Ethereum's Next Killer App Is on Its Way - CoinDesk". CoinDesk. 2017-12-15. Retrieved 2018-05-02.
  7. ^ "Decentraland as a Playground for Crypto-Collectibles". Decentraland. 2017-12-13. Retrieved 2018-05-02.
  8. ^ Wong, Joon Ian. "CryptoKitties is jamming up the ethereum network". Quartz. Retrieved 2018-05-10.
  9. ^ "CryptoKitties Mania Overwhelms Ethereum Network's Processing". Bloomberg.com. 2017-12-04. Retrieved 2018-05-10.
  10. ^ "CryptoKitties raises $12M from Andreessen Horowitz and Union Square Ventures – TechCrunch". techcrunch.com. Retrieved 2018-05-07.
  11. ^ "Crypto-collectibles and Kitties marketplace Rare Bits raises $6M – TechCrunch". techcrunch.com. Retrieved 2018-05-07.
  12. ^ "'Ebay for CryptoKitties' Raises $2 Million from All-Star VCs - CoinDesk". CoinDesk. 2018-05-10. Retrieved 2018-10-22.
  13. ^ "Blockchain startup Gamedex raises $0.8 million seed round to build platform for digital collectible card games like Pokemon – TechStartups". techstartups.com. Retrieved 2018-05-07.
  14. ^ Russo, Camilla (2018-06-12). "Making a Killing in Virtual Real Estate". Bloomberg. Retrieved 2018-09-05.
  15. ^ Hankin, Aaron (2018-09-04). "People are making more than 500% buying property that doesn't actually exist". MarketWatch. Retrieved 2018-09-05.
  16. ^ Kameir, Christian. "What Could CryptoKitties Mean For The Future Of Ownership?". Forbes. Retrieved 2018-10-25.