The Complete Guide to Non-Fungible Tokens (NFT)
April 7, 2022
What is a non-fungible token? And how they work?
Non-fungible tokens are a form of digital asset that is unique and cannot be exchanged with another token. They are used to represent ownership of an item on the blockchain. Unlike regular (fungible) tokens, one non-fungible token cannot be substituted for another because they are all individually unique.
Non-fungible tokens have existed since 2012, when they were created as “coloured coins” on the Bitcoin blockchain. They weren’t widely used for many years, and we only really saw an explosion in usage recently.
NFTs (Non-Fungible Tokens) can be used for a range of usecases. For example, to represent ownership of cryptocurrency or any other asset on the blockchain. However, they are commonly used to represent ownership of digital items like rare collectibles, in-game items and digital work of art.
It’s good to keep in mind that whilst NFTs are mostly used for art and gaming currently, they can be used to represent any kind of digital or even physical assets. This extends to ownership of things like cars and houses, personal identity, data and they can even be used to provide access to exclusive content and experiences.
What are the Different Types of Non-Fungible Tokens?
NFTs as a technology can be used to provide a wide range of solutions. And whilst the possibilities are endless, the most popular and promising ones include:
- Art
- Gaming
- Ownership
- Enterprise NFTs (ENFT)
- Asset representation
- Event tickets
What Issues Can NFTs Solve?
NFTs can solve the problems of counterfeit and fraud, as well as copyright and ownership issues.
Interestingly, NFTs also have a lot of applications in businesses. Here NFTs are known as Enterprise NFTs (ENFT). They can be used in many industries such as healthcare, manufacturing, and supply chain management.
NFTs are non-fungible tokens which can represent any digital or physical asset. They are stored on a blockchain and they have a unique identifier which makes them easy to distinguish from one another. The NFTs themselves can contain data, such as data pointing to a digital file stored in a decentralized server, which is something that can be extremely valuable when dealing with sensitive data or high value contracts.
Another great example is where NFTs are created to represent assets in a supply chain. In that example, production, storage or location data surrounding a product can be tracked to each individual product or batch of products, creating a record of its history that other companies in the supply chain and even consumers can see.
NFTs will change the world by allowing for more efficient ownership rights. They will allow for many new trading constructions, in which physical goods can be traded through their NFTs. NFTs will change the world by improving the way we trade and transact with one another online through decentralization and transparency.
Furthermore, an important usecase to remember is that of the Metaverse. In this virtual reality, virtual goods can be owned by people based on NFT technology.
In all these possible situations, the blockchain makes sure that all data is recorded in a chronological order that can’t be altered. This means that it provides an accurate record of all actions made on the network. And because it's decentralized, there is no single point of failure which means that it cannot be controlled by any one person or organization.
How can I Create a NFT?
There are currently many ways to create NFTs, but most are focussed on digital art. You can use any of the existing platforms to do that, such as the popular OpenSea. Keep in mind that those marketplaces themselves are not centralized, which is something that will be on the Zinnia roadmap..
Furthermore, Zinnia will release a consumer focussed mobile app that allows everyone to create NFT backed proof for things like pictures, documents, music and contracts. It will be a very straightforward proces and should be easily manageable by everyone.
For enterprises looking to get into Enterprise NFT solutions, we will work with industry partners, like LifeHash, to implement industry specific NFT solutions.
