What is an NFT and How are they Changing Society?

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What is an NFT and How are they Changing Society

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NFTs are digital goods that exist on the blockchain – decentralized platforms that allow users to engage in a market of trustless trading. The term is often used to describe the emerging field of non-fungible tokens, which are parts of an asset or token without any fungibility. In most cases, each item you trade on the blockchain has a unique identifier linked to its history and when it was created. NFTs are changing today’s society in various ways.

What is an NFT?

NFTs are sometimes referred to as non-fungible tokens. The intention of these tokens is not to be fungible – because they cannot be combined, exchanged, or traded with another item. Instead, they were designed to act as unique digital crypto assets.

  • NFTs and E-Commerce

NFTs are not the first of their kind and are only one form of a broader category within the e-commerce space termed “non-fungible tokens.” Since the Internet became a mainstream tool, unique digital assets and goods have been around. As e-commerce has grown and the prevalence of non-fungible tokens, they have been referred to by many different names: rare Pepe trading cards, unique Pokemon cards, and tokens on Neopets. In 2007, the market saw a major transition when the United States Justice Department intervened in two centralized digital collectibles exchanges. Ultimately, this challenged an established centralized business model that was not yet entirely decentralized.

Today, this same model lives on through centralized exchanges, allowing users to buy, sell, and trade digital collectibles. This market has defined the burgeoning field of non-fungible tokens, which are a major part of the NFT minting platform in the e-commerce space and are growing in popularity every day.

  • NFTs and Blockchain

In late 2017, the idea of trading unique virtual assets was further popularized in the blockchain space with CryptoKitties. As their name suggests, they are collectibles – one of the earliest use cases of NFTs. However, unlike those made on centralized platforms, CryptoKitties were decentralized. Since a single global token ( ETH ) served as the currency for all players in a match, no central organization could dictate what happened in a market of trustless trading. This created a new form of digital collectibles traded on the blockchain with no central intermediary.

  • Role of NFTs In Gaming

Recent decentralized apps have been built on Ethereum to create a more functional game. The apps allow users to trade unique virtual assets while they play. These assets can be anything from digital pets to clothing and real estate – with the only limitation being what a developer might decide to place on their platform.

Open platforms allow developers to put their games out on the marketplace and immediately start allowing players to trade assets in a decentralized manner. The possibilities are endless, and there’s no telling what a developer could put out there. This is just one of the many ways that NFTs are being used in e-commerce. Other major e-commerce companies are buying into the idea to create a digital asset registry for their user-to-user marketplace. Another way NFTs are being used is through unique digital goods in online stores.

Trading digital goods and assets is an old idea. People like to trade items among friends for fun, but legally, it’s not something you can make money from. The purpose of closed gift circles was to enable people to gift items among a small group of friends while avoiding the potential problems associated with gifting or trading items that could be seen as illegal, such as drugs or guns. There are already several companies in the space, and they have been around for years.

Successful implementation of non-fungible tokens is not just limited to blockchain games created on cryptocurrency platforms. NFTs, in general, are growing in popularity among e-commerce businesses worldwide.

Conclusively, NFTs are on the rise in many forms worldwide and are being used to create a market of trustless trading where users can sell their unique digital goods and assets directly to one another. This model allows anyone with a phone to purchase or sell digital assets without the need for a centralized intermediary. Ultimately, these tokens represent an entirely new type of asset class.

What is an NFT, and How are they Changing Society?