With the creation of Bitcoin back in 2009, Satoshi Nakamoto would have probably never guessed that the world would buy digital, collectible CryptoKitties, Punks, Hashmasks, celebrity music, and so forth.
However, all of the above made use of a whole new Ethereum standard for identifying unique assets on its blockchain – the ERC-721, better known as the solution for the creation and transfer of non-fungible tokens.
This article discusses the following questions related to non-fungible tokens:
What is a non-fungible token?
What are the characteristics of NFTs?
How do NFTs work?
Why do we need non-fungible tokens?
Which projects are actively using NFTs?
How to Buy and Transfer NFTs?
What is a non-fungible token (NFT)?
We can describe an NFT as a cryptographic token that defines an asset uniquely. It can represent both a digital asset such as an image, but it can also track real-world assets, such as a house or car, or a song, for example. As you can uniquely define assets, this means you can also prove ownership over said assets, and moreover, prove their authenticity.
You might wonder why we need non-fungible tokens to uniquely track assets? The problem with regular tokens created using the ERC-20 standard is that they are divisible and can be interchanged.
We don’t want this property for tracking unique assets. This would mean you can divide your digital image or physical car into different tokens and distribute it. That would defeat the whole purpose of non-fungible tokens, as you want only one …
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