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 mutually interchangeable by their individual specification.[1] This is in contrast to cryptocurrencies like Zcash, and many network or utility tokens that are fungible in nature.[2] [3]

Applications[edit]

Non-fungible tokens are used to create verifiable digital scarcity, as well as player ownership, and the possibility of asset interoperabilty across multiple games.[4] 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.[5] NFTs are used to represent in-game assets, and are controlled by the user, instead of the game developer.[6] This lets the assets be traded on third-party marketplaces without permission from the game developer. NFTs also find potential use in digital art, by helping prove authenticity and ownership.[7]

Specific token standards have been created to support the use of blockchain in gaming. These include the ERC-721 standard of CryptoKitties, and the more recent ERC-1155 standard.[citation needed]

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] OpenSea, a marketplace for both ERC721 and ERC1155 non-fungible tokens referred branded as the "eBay for CryptoKitties", went through Y Combinator in Winter 2018, and raised a $2.3 million seed round from Founders Fund and Coinbase Ventures.[11] RareBits, a Non-Fungible Token marketplace and exchange, raised a $6 million investment.[12] Gamedex, a collectible cards game platform made possible by NFTs, 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] Nike holds a patent for his blockchain-based NFT-sneakers called ‘CryptoKicks’.[16]

References[edit]

  1. ^ https://www.merriam-webster.com/dictionary/fungible Missing or empty |title= (help)
  2. ^ Schroeder, Stan. "Crypto trading card game 'Gods Unchained' looks pretty sweet in first gameplay trailer". Mashable. Retrieved 2018-11-18.
  3. ^ http://zerocash-project.org/q_and_a#why-do-i-need-fungibility Missing or empty |title= (help)
  4. ^ "Enjin is Creating a Real-Life Ready Player One, and It's Powered by Blockchain". VentureBeat. 2019-04-16. Retrieved 2019-08-14.
  5. ^ Wong, Joon Ian. "The ethereum world is now obsessed with breeding cartoon cats". Quartz. Retrieved 2018-05-02.
  6. ^ "CryptoKitties shows everything can — and will — be tokenized". VentureBeat. 2017-12-04. Retrieved 2018-05-02.
  7. ^ "The Art World Needs Blockchain – Irish Tech News". irishtechnews.ie. 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. ^ wired.com https://www.wired.com/story/y-combinator-demo-day-uber-for-x/. Retrieved 2019-12-28. Missing or empty |title= (help)
  12. ^ "Crypto-collectibles and Kitties marketplace Rare Bits raises $6M – TechCrunch". techcrunch.com. Retrieved 2018-05-07.
  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. ^ https://thenextweb.com/hardfork/2019/12/10/nike-blockchain-sneakers-cryptokick-patent