Reposted from Non-Fungible Tokens - Explaining NFTs, ERC-721 and ERC-1155
For the readers’ convenience, the content of this blog has been adapted based on the original one.
What is an NFT?
NFT stands for non-fungible token and represents ownership of a unique item that can be used or traded. Each NFT has its unique properties and is indivisible.
NFTs are often associated with specific tokens, such as images and music, or represent a license to use a token for a specific purpose. Common use cases of NFTs include art, domain names and finance.
NFT use cases
Seemingly the most common type of NFT art available is programmable art, intertwining creativity and technology. There are thousands of limited edition 4D moving artwork pieces that can be programmed to change upon different circumstances being met. With the use of oracles and smart contracts, artists have created images that respond according to the price fluctuation of crypto tokens. For example, a picture of the Mona Lisa has been digitally recreated to smile as the price of ETH is going up, and to frown if the price has gone down.
The traditional fine arts industry appears to be showing interest in blockchain technology, through the use of tokenizing real-life artwork. The use of IoT (internet of things) and blockchain, means one can scan a code on a sticker placed on the back of a painting, and register as the owner of the piece on the blockchain. The blockchain could then display an artwork’s full history of previous owners and prices sold for.
Certifications and Personal Licenses
Following the completion of a course, a certificate is usually received in either a hard (paper) or soft (online) copy. Most employers and universities will require copies of these certificates as part of the referencing process before offering someone a position in a company firm or educational institution.
Having a personal license or certification recorded on the blockchain as an NFT saves countless hours of administrative processes finding, checking, and verifying records. It also provides an easy way for a graduate to safely and securely store the evidence of their education, without the worry of it getting lost or deleted in the future.
One of the first ways people learn how to use NFTs is usually through online collectibles, such as Bored Ape, which is one of the most successful NFT collections to date. It is a collection of 10,000 unique Bored Ape NFTs, each with a different combination of features like fur color, background color and outfits. And the holder of Bored Ape NFTs has exclusive access to the Yacht Club, a members-only merchandise store and intellectual property rights to the images.
An additional way people are learning how to use NFTs, without necessarily realizing it, is through decentralized domain name services such as Unstoppable Domains, or the Ethereum Name Service (ENS). The ENS allows users of Ethereum based crypto wallets, to change their address from a long, difficult-to-remember string of numbers (e.g. 0x…) to ‘myname’.eth, creating a much friendly user and on-boarding experience.
Music files or songs can be attached to NFTs, meaning that only the person who owns that song can listen to it. Platforms such as Rarible and Mintbase allow artists to mint their songs in the form of a non-fungible token for fans to enjoy.
From a dedicated fan’s perspective, this means that only a limited amount of these records will be available, they cannot be copied or uploaded anywhere else, giving the music a collectible-quality similar to that of vinyl, but with the modern technology underpinning its rareness.
A record collection was one of the most common forms of collectibles in pre-digital popular culture, but this was overturned by the introduction of the internet and music streaming sites. Music pirating is rife within the industry and costs artists millions.
With the use of NFTs, not only can artists cut out middlemen and be paid directly in full by their fans, but the music can be a limited or special edition run.
In the game, an NFT can represent a character or outfit held by the player and can be transferred to others if the original owner decides to sell it. In the summer of 2021, Axie Infinity, a blockchain game inspired by Pokemon, enables players to earn money while playing the game. Each Axie pet has different traits which determine their role in a battle.