The future of non-fungible tokens or digital certificates
The crypto space continues to evolve with more non-fungible tokens (NFTs) entering the market. These non-fungible tokens are different from their fungible counterparts as they are unique and non-interchangeable. Most cryptocurrencies try to achieve the property of fungibility because the token is a means of exchange and unit of account rather than being something unique and valuable itself.
The launch of ERC-721 in 2017 changed everything and purposely so. This is the standard on Ethereum that allows the creation of non-fungible tokens, and it opened up the possibilities for digital collectibles.
The Importance of non-fungible assets
Non-fungible tokens serve an important purpose in the crypto space. These tokens are created to represent a particular asset in the digital ecosystem. They can be held virtually or represent real world assets, such as documentation, real estate, and personal details.
The research continues…
The research in the field of non-fungible tokens continues with IBM leading the way. The thing that makes non-fungible tokens different from others is the fact that it can’t be duplicated and forged. The ability to be authenticated without the need of any third party intervention is what makes it a unique proposition and gives it a considerable advantage over other verification systems.
The advantage of tokenizing
Tokenizing real-world assets has opened a whole new vista and paved the way for frictionless transfer. It has cut down on the hassle and made the whole process a smooth one. For example- consider selling your car to someone. The whole process is a cumbersome and tedious one. Now, just imagine that your car was tokenized. You would just accept the payment from the buyer and transfer the token of ownership. It is this ease and frictionless way of functioning that gives tokens an edge in real-world situations.
Tokenizing real-world assets
Tokens are not just confined to the virtual world. They are also making their foray into the real world. Non-fungible assets are seeing growing use in the tokenization of real-world assets. The tokenization of real estate has already begun. One such example is Blocksquare, which has started utilizing PropTokens to represent a particular property. While the concept holds promise it might take some time to foster large scale adoption.
Tokenizing physical and real-life objects gives investors a chance to expand their portfolio, and owners more potential liquidity when they need it.
Ethereum’s 721 protocol is the most popular platform used for the development of non-fungible tokens. It gained popularity in the second half of last year, thanks to the Ethereum-based game CryptoKitties. With regards to the current crypto collectible market there are some CryptoKitties selling for over $60K. This game allows the users to trade digital assets in the form of virtual cats. This virtual game utilizes the Ethereum’s ERC-721 protocol to make sure that each digital asset has unique traits and identities.
Rise of non-fungible tokens
Blockchain technology is such a development that can uproot many established industries and establish a new norm. One of the areas of blockchain that has produced some early traction is non-fungible tokens. While it is still in a nascent stage, there are some projects (CryptoKitties, KittyHat, and Crypto Punk) in the market that have brought to fore the immense potential that this space holds.
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