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What is NFT (non-fungible token)?

The full name of NFT is Non-Fungible Token, which is translated as "non-fungible token" in Chinese.

What is a token? (Token) In the cryptocurrency market, there are tokens, which can be called "tokens" in colloquial terms.

 

From a technical point of view (if you know how to write programs), Token is actually very similar to the concept of Object, and people with a background in capital can understand it from this perspective.

In the blockchain, Token generally has the following three types:

 

Payment Tokens: The currency circulating on the blockchain market is mainly used for payment or as asset storage, such as Bitcoin (BTC), Dogecoin (Dogecoin), and Ethereum (ETH)......

 

Utility Tokens: Provide users with access to products or services, and users need to have the tokens to use related services, such as VReS tokens. In a real-life example, like Tom Bear's game tokens and parking tokens for parking lots, you need to hold its tokens to enjoy services (playing facilities, parking... etc.)

Asset Tokens: Asset Tokens represent assets, similar to stocks, bonds, etc. issued by companies, and holders can obtain relevant rights and interests (such as dividends, interest income)

 

In addition to the above functions, the blockchain itself also has the characteristics of openness and transparency and difficult to tamper with. Therefore, it is quite difficult to counterfeit, and you can ensure that you are holding a genuine product, not a counterfeit.

  At present, there is no clear definition of what kind of token NFT belongs to. However, due to its property of preserving assets, most people in the circle agree that it is an asset token, but I think this is not important, at best, it is just hard to classify NFTs, m0it doesn't make much sense (the exam will not be tested). It is more important to understand the application context of NFTs in real life.

 

What is Non-Fungible?

 

Cryptocurrency can be divided into two types: Non-Fungible and Fungible according to whether it is divisible or not. The NFT we will introduce today is a non-fungible token.

Fungible means that they can replace each other and are separable. Just like a 1,000 yuan banknote, different 1,000 yuan banknotes can replace each other, and 1,000 yuan can be exchanged for 500 yuan and 100 yuan banknotes (dividable).

"Cryptocurrency" is a fungible token. Therefore, a bitcoin in my hand and a bitcoin in Elon Musk's hands have the same value, and the  bitcoin can be divided into minimum 0.00000001 bitcoins, and at the same time it can be Add and subtract.

From a technical point of view, on Ethereum, it will be through the  ERC-20 agreement to achieve a "fungible token" smart contract and issue its own cryptocurrency.

As for the non-fungible token, it means that it cannot be replaced by each other and cannot be divided. For example, each NFT has its own number (meaning that each is unique), so the NFT in your hand is not equal to the NFT in my hand. .

It is like the original Mona Lisa and the counterfeit products of other painters. Although they look the same on the outside, the value of the two is far apart;

Even if Leonardo di ser Piero da Vinci is resurrected, and another Mona Lisa is repainted, it will not be 100% the same as the one kept in the Louvre.

 

In other words, even if we buy the same product on NFT, the NFT in our hands is still different because of the different product numbers.

As mentioned earlier, the blockchain technology has the characteristics of "non-tamperable", and NFT has the "uniqueness", so when the two are combined together, it can create the "untamperable unique authentication" feature-this is exactly what has been a headache for the art world in the past.

This is why NFT will start to become popular in the field of art first.

 

With the characteristics of blockchain, it is completely impossible for NFT works to be counterfeited. Therefore, artists or large organizations (such as the NBA) can confidently make their own works (paints, videos, music, animation, cards, virtual characters, virtual land...) into NFTs, and then publish them to the public :"This is an NFT work issued by this organization or myself." Those who bid for the purchase do not need to worry about whether it is fake or whether there will be fakes out of the future.

From a technical point of view, on Ethereum, the ERC-721 or ERC-1155  agreement will be used to implement the "Non-Fungible Token" smart contract and issue related NFT works. If you want to know more details, you can refer to this article: NFT standards (ERC-721 & ERC-1155).

 

What are the product areas covered by NFT? Since NFT is indivisible, unique, and can easily distinguish between true and false, it is currently mainly used to distribute "virtual goods", such as artworks, game props, music, photos, etc. The following are currently known products Type:

§ Artwork

§ Video

§ Music

§ Insurance

§ gif

§ Games

§ text

§ meme, stalk map

§ …Welcome to add in the comments

 

Because many artworks currently sold on NFT are scarce (few artists sell works on it, and they are sold in limited quantities), and scarcity will cause prices to rise, making the NFT trading market very hot .

In addition to the art circle, NFT has gradually become popular in the sports world. Many teams have issued fan tokens, allowing fans to purchase the team’s NFT digital tickets through the tokens to visit the game, or to serve fans around the NFT team, such as Both the NBA and Taiwan's basketball teams have participated in the NFT boom and issued player cards. 

 

The NBA Top Shot launched by the NBA is a collection game launched by the NBA and the founding team of CryptoKitties Dapper Labs. Users can collect various player cards and player essence clips on the platform, store them in the form of NFT, display them on your favorite page (NBA Top Shot is not currently available in Taiwan);

The basketball team in Taiwan, Hsinchu JKO Lioneers also cooperated with the ACE Exchange to issue the first professional basketball NFT digital player card over all over the Asia.

 

In the future, NFT may have a wider range of applications. Because of its unique characteristics, it is easy to think of its development in patents and intellectual property rights. In the future, as long as creators store their works in the form of NFT in the blockchain , You no longer need to send it out through centralized organizations (such as audio-visual platforms, social platforms), then it can remain most of profits to the creators.

Furthermore, NFT may also be applied to the ownership indication on physical assets, such as real estate, artwork, insurance... etc. NFT can represent part of the ownership of real assets, and in the form of tokens in the blockchain network Storage can make it easier to conduct circulation transactions in the market, and can also reduce the commission of intermediaries (both parties to the transaction can transfer in person without going through complicated procedures such as banks and real estate agents).

 

Even when one day humans want to create identities in the virtual world, they can also use NFT technology to assist. In the future, when people store identification or ownership information, NFT can help their privacy and integrity. Did you think of the movie "Level 1 Player"?

Of course, these are just imaginations at present, but it can also be seen that the development potential of NFT is really huge.

 

Classic works auctioned on the NFT,  at present, many companies and celebrities are selling products on the NFT. The following is a list of well-known products that have caused a sensation:

(Welcome to provide the information you know in the message area, I will update it again)

 

§ The first tweet by Jack Dorsey, the founder of Twitter, sold for US$2.755 million (approximately NT$78 million)

§ NBA star card: NBA Top Shot (currently inaccessible in Taiwan)

§ Taiwan Basketball Team: The digital player card of Hsinchu JKO Lioneers, the first professional basketball NFT digital player card in Asia

§ The Godzilla series also sells a variety of images, comic covers and dynamic cards on NFT

§ The author of the well-known internet meme Nyan Cat made the Nyan Cat NFT and sold it for 300 ETH (about 15 million Taiwan dollars)

§ The well-known Stem Picture Fire Girl was sold for US$500,000 

§ Uniswap team limited 500 pairs of UNISOCKS, a pair of asking price of 160,000 US dollars

§ The painting Morons of the artist Banksy was bought and burned by the team Burnt Banksy, then made into NFT and sold on OpenSea

 

§ The well-known art director Ben Mauro sells legendary card packs on VIV3. Ben Mauro has participated in the games CALL OF DUTY and Halo; many of the designs of the movie Hobbit are from his hands.

§ Beeple's "EVERYDAYS: THE FIRST 5000 DAYS" was sold on the established auction house "Christie's" for US$69.3 million; CROSSROAD was sold for US$6.6 million

§ Playboy announced its cooperation with Niftygateway. In the future, you may see Playboy upload past magazine content

§ Sotheby’s will auction works by artist Pak

§ Musk originally planned to sell electronic music on NFT, but later decided to keep it for himself

§ TIME magazine sells three NFT works on SuperRare, "Is God Dead?", "Is Truth Dead?" and "Is Fiat Dead?"