Non-Fungible Tokens abbreviated simply as NFTs are one of the numerous digital assets that permeate today’s digital ecosystem. While Non-Fungible tokens are relatively not as popular as the other digital assets which include Security Token Offerings, Digital Bonds, and the now much popular cryptocurrencies, they are one of the growing innovations in the blockchain ecosystem.
In explaining what Non-fungible tokens means, a side by side comparison with fungible tokens is needed. Fungibility is a term that connotes the replaceability of an item or goods. Fungible tokens of which the popular cryptocurrencies such as Bitcoin (BTC), and Ethereum (ETH) are an example are tokens which can be easily replaced. What this means is that, if you send one Bitcoin to someone, and the person uses that Bitcoin for a transaction, such a person can send you another Bitcoin at a later date.
The new Bitcoin sent to you is different from the old one but does not in any way different from the first you sent. That is the idea with fungible tokens and non-fungible tokens are the exact opposite of what has been described. As a cryptographic token, the smart contracts of NFTs contain specific and unique codes that make the tokens unique and one NFT cannot be replaced with another.
The irreplaceability of these Non-fungible tokens contributes in part to how valuable anyone’s creation can be. These NFTs are used to represent real-world items, works of art, gaming, and a host of other things that can be created uniquely from others. The use of blockchain technology has added to the credence that NFTs can rely on to prove uniqueness and avoid the incidence of counterfeiting.
As a more cautious revelation to the growing niche applications of Non-fungible tokens, it is necessary to point out that real-world assets like digital arts are beginning to find appreciation and that is thanks to Non-fungible tokens with the backing of blockchain technology which helps to preserve authenticity.
NFTs are currently becoming a big deal in the blockchain ecosystem, but their recognition is still not at par with those of the popular digital currencies.
Although, comparing how widely accepted Bitcoin and altcoins have amassed widespread or mainstream adoption to the budding NFTs may be out of place. This is because both classes of digital assets serve different unique purposes and while the former find primary applications in the financial ecosystem, the applications of the latter are not confined and are notably evolving.
The journey to mainstream adoption for NFTs can come with increased awareness, which will be achievable with the emergence of dedicated markets for the creations, just like numerous exchanges sprung up for cryptocurrencies. The notable marketplaces for non-fungible tokens include Cryptokitties and Decentraland, with the former dedicated to the breeding of digital cats with unique characteristics and the latter serving as a gaming platform for NFT innovations.
Unlike cryptocurrencies which are relatively cheap, NFTs can be priced very expensively and this in a way contributes to limiting massive adoption of the creations. Nonetheless, Non-fungible tokens are gaining massive momentum with the promise of finding applications in most industries, particularly those that operate with real-world assets. This with more simplified and broader means of creating the NFTs beyond the ERC-721 standards applicable on Cryptokitties and Decentraland, more creators can enter the space.
A shift from the Ethereum network to other blockchains such as TRON, EOS, and NEO that have provided capacity for NFT development can also help drive more mainstream adoption of the Non-fungible tokens.