Hello everyone, how is it going? Happy new month! The second season of the Engagement Challenge is almost gone, what a ride it has been. It has not been too easy but we keep pushing 💪🏾. I welcome you to my post today on NFTs (Non-Fungible Tokens). I will be writing exclusively on NFTs, how they defer from fungible tokens, their applications etc. Please, take your time and enjoy.

Using your own words to define non-fungible tokens: NFT, and to show the difference between fungible and non-fungible tokens.

---

What are NFTS (Non-fungible tokens)?

---

NFTs are becoming more popular each passing day, most of us hear about it here and there, from our friends or when crypto people are discussing but don't really know what it is or even the full meaning.

Well, Non-fungible tokens (NFTs) are digital assets. Digital assets in the sense that they can only be bought or sold on a blockchain network and are only accessible on digital devices, no physical contact. An NFT can be an artwork, videos, game characters, music (as in audio), even tweets. Jack Dorsey, Twitter former CEO sold his first ever tweet as an NFT.

NFTs can also be thought of as digital assets represented by a token registered on a crypto blockchain to ensure it is one of a kind thereby, ensuring ownership as well.

Non-fungible tokens (NFTs) and cryptocurrencies are sometimes mistaken for each other by non-crypto people. But, in the real sense, the only similarity both share is that they are built on a blockchain and with the same programming encryption.

Unlike cryptocurrencies and physical currencies which are fungible, NFTs are non-fungible which means that it is not possible to exchange an NFT for another NFT because each has a unique digital signature that makes it impossible for any two NFT to be equal.
NFTs are held on a blockchain, typically Ethereum blockchain but most blockchain supports them as well.

---

Difference between fungible and non-fungible tokens

---

Since we are discussing tokens, I will be explaining the difference between fungible and non-fungible assets in the context of blockchain.

In a blockchain, fungible tokens are cryptocurrencies the likes of Bitcoin, Ethereum, USDT etc. while Nonfungible tokens as defined in the previous section are digital assets also stored and verified on a blockchain.

Fungible tokens like Bitcoin are not unique, can be divided and of course can be exchanged for one another because their value is the same everywhere. 1 BTC = 1BTC anywhere in the world.

Non-fungible tokens, on the other hand, are unique and non-divisible. They represent a particular intangible item like an artwork or stocks.

The table below summarizes the main differences between Fungible token and non-fungible tokens

Fungible tokens	Non-fungible tokens
They can be divided i.e. part can be shared, saved or spent.	Indivisible
They are not unique.	Each are unique.
Can be traded or exchanged.	Cannot be exchanged for one another.
Stores value.	Stores data e.g. an artwork.
Most own a blockchain.	Always built on an existing blockchain.
Examples are: BTC, ETH, USDT etc.	Examples can be: game avatars, artworks etc.

Are NFTs interchangeable? What are the differences between an NFT and other currencies? Is there an NFT marketplace? And how to invest in NFTs?

---

Are NFTs interchangeable

---

No, NFTs are not mutually interchangeable i.e. they cannot be exchanged or traded for one another as mentioned many times already in this post and this is because every NFT represents a unique digital asset with digital signature which makes it impossible for an NFT to be equal to another. Hence, rendering then unexchangeable.
Nevertheless, they can still be bought or sold using other currencies.

---

What are the differences between an NFT and other currencies?

---

NFTs are different from cryptocurrencies and fiat currencies (government-issued currencies). They are different from any other known currency really. The major reason is because NFTs are non-fungible while other currencies are fungible. Other currencies can be exchanged for one another because they are of the same value or there is an equivalent. NFTs are not interchangeable.

---

Is there an NFT marketplace?

---

Yes! There is of course an NFT marketplace. NFT marketplaces are where you can buy/invest in NFTs and yes, there are lots of options out there to choose from. Your NFT marketplace choice would mostly depend on what digital asset you want to acquire, your storage and the cryptocurrency you plan on paying with.

OpenSea is the most popular and largest NFT Marketplace, it's the leading marketplace in sales of NFTs. It is very easy to get started using OpenSea, just a simple Sign up and you can start exploring all sorts of digital assets available on the platform. It supports artists and creators as well. With its user-friendly nature anyone can also create an NFT on the platform.

Other NFT Marketplace are:

1. Axie Marketplace
2. Larva Labs
3. NBA Top Shot Marketplace
4. Rarible
5. SuperRare
6. Foundation
7. Nifty Gateway
8. Mintable
9. Theta Drop

---

How to buy or invest in NFTs?

---

NFTs are increasingly becoming popular, leading and luring many investors and collectors alike to buy these digital assets. But if you are just getting started in the crypto world and maybe want to invest in NFTs, I will tell you just how, come with me.

NFTs can be purchased on NFTs marketplace just as mentioned above. These marketplaces are kinda like eBay or Amazon only that they sell digital assets. These marketplaces sell NFTs at a fixed price or some are put up for auction and of course price of the auctioned ones are very volatile as they change with time and demand.

In order to buy or bid (in the case of auctioned NFTs) for these digital tokens, one needs a crypto wallet, which is a digital wallet used to store or save cryptocurrencies. Popular crypto wallets include: Trust wallet Kucoin, Binance, MetaMasketc. You need to fund this crypto wallet with cryptocurrencies needed to buy NFTs on any marketplace. The cryptocurrency you want to fund your crypto wallet with would most of the time depend on the blockchain your target NFT or NFTs is/are built on. For example, NFTs built on the Ethereum blockchain may be required to be purchased using Ether tokens, the native cryptocurrency of the blockchain.

Next step is to choose the NFT marketplace of your choice that has your targeted NFT. Note that, NFTs are also stored in crypto wallets. So, on purchase of your NFTs, safely store them in your crypto wallet.

How to create a new NFT and is it possible to have an NFT stolen? And why use a distributed file system like IPFS in this area?

---

How to create a new NFT

---

I never thought of creating or minting an NFT until now. Creating or minting an NFT is easier than most of us might think. If you are like me who has never created or minted an NFT before, follow the step-by-step guide below, you would have all it takes to create your first ever NFT.

While NFTs can be created using a laptop or desktop computer, there are mobile phone apps as well that can be used to mint NFTs and also track how your NFTs collections are doing on various blockchains.

Nonetheless, I am using a laptop for this quick tutorial.
STEP 1: Create a crypto wallet account

To set up an account on any NFT Marketplace, you need a crypto wallet account. You now know what a crypto wallet account is and the popular ones. I would be using MetaMask as it is widely used, very accessible and easy to set up.
If you don't own a crypto wallet, follow the link above to create a MetaMask wallet account. You would have to download their app first though. The download link is available on their site as well.
On creation of your Metamask wallet account, you'd be given a "12-word security phrase", keep it and your password very safe. The "12-word security phrase" would come in very handy for password recovery, should you forget your password.

STEP 2: Create an account on an NFT Marketplace
Next, is to create an account on any NFT Marketplace of choice. I choose the Rarible marketplace.

• Click on the connect wallet button to connect a crypto wallet, this will help setup your Rarible Marketplace account.
• Choose MetaMask wallet or any other wallet you have an account on to Sign up.

• Read and follow through with the pop-up that shows up. It is self-explanatory.

• After successfully connecting your crypto wallet account, the pop-up will disappear. You will then be required to enter your Display name and email to complete the sign-up process.

STEP 3: Choosing an art
You can decide to quickly sketch an art using any free drawing tool available online or on your device or better still use an art you have ready. If you are in a hurry and just want to quickly create an NFT for testing's sake, you can use any free image from the web as well.

STEP 4: Uploading your art

• To upload your art, click on the create button first, then choose the blockchain you want your art to be on.

• Then, proceed to upload your art.

• Choose if you want put a fixed price on you NFT or put it up for auction,
• Input a price if you choose fixed price.

• Fill up other details like name of your NFT, Description, Royalty etc. Let's say you set 10% royalty, this means you get 10% commission every time there is change in ownership.

STEP 5: NFT created

• Finally, click the create button.

That's it, you have just created an NFT.

---

Is it possible to have an NFT stolen?

---

My answer is yes. Just like how crypto tokens or currencies can be stolen from digital wallets or during transactions, non-fungible tokens as well can also be stolen in the same way.

We all know that NFTs are built on a blockchain and blockchains are very secured and cannot be hacked. This is very true. However, it is not the blockchain that will be tampered with by these malicious users in an attempt to steal an NFT, they instead target digital wallets where NFTs are stored and where transaction happens.

---

Why use a distributed file system like IPFS in this area?

---

Going in-depth on how NFTs truly work, non-fungible tokens are still tokens you might now ask yourself how are tokens digital assets? The answer is that, an NFT is a unique token on a blockchain that references or points to an off-chain digital file this could be an MP3 file (audio), images (arts), certificates etc. any digital file really. The fact that this digital file is now provably unique, is where the value comes in.

We then ask ourselves, where these off-chain digital files that NFTs link to are located, well they are on servers so are website pages and other digital contents. Website pages on servers for example can be accessed via a URL, but there is no guarantee that a given URL would continue to respond with the same content overtime i.e. it is mutable. Digital assets or files NFTs are referencing cannot be accessed on the servers they are stored this way because then it can be changed and the whole idea behind using NFTs to make them unique is made useless.

This is where IPFS comes in. IPFS, which stands for Inter-planetary File System completely revolutionizes hosting and it is the underlying system that makes the whole NFT idea work.

IPFS does not make use of the conventional URL to access digital assets on servers, rather it uses an hash. An hash is assigned to a digital file based on its content and changes whenever the content changes. The hash of a digital file will be used to access it content on the server. This way it is assured that an hash will always point to its content which is why NFTs use this technology together with blockchain technology to make the whole idea work.

---

How are NFTs used in art, video games and collectible card games?

---

How NFTs are used in art

Non fungible tokens (NFTs) are now used in some programmable art combining the uniqueness in technology and very good creativities.

Most of the NFT's that are available in the Crypto space are mostly artworks and this has really boosted the rate of creativity because the more creative you are the more your NFT get a higher sale in the marketplace. NFT is used to authenticate digital art creativity. NFT has made a lot of People millionaire through putting skills and creative ideal together.

We have some beautiful software used in making NFTs through art I will be mentioning few of them.

📌 Adobe Photoshop.
📌 Krita.
📌 SketchAr.
📌 Corel Painter.
📌 GoArt.
📌 PixelChain.

NFT has been in existence since the early 1990s and got a sudden shoot up in 2021 and since then NFT has been a really marketable thing for artist and the art industry grew wider because a lot of people want to have an NFT.

How are NFTs used in video games

NFTs helps game owner and players to be a have their own character and customize it the way they want.

Gamers make use of NFTs to make more revenue through livestreaming that attract more viewers.

Characters built or customized by gamers can be sold on the NFT Market and this will serve as an additional income to them.

NFTs are used to buy gaming features like coins, weapon, character and other gaming features.

---

How are NFTs revolutionizing property titles?

---

The introduction of NFT has brought a lot of relief to the world transaction system because more properties are been revolutionized through NFT which is making the banks less powerful.

There is rapid change in the world now that digital currency is taking over and so many properties have their titles changed through NFT transaction, an example is the real estate market.

So many transactions are made using NFT to revolutionize so many properties in the world today and all these transactions are done without too much intermediary and payments are very fast and secured using NFT.

---

How are NFTs regulated?

---

Non fungible tokens (NFTs) don't really have any regulation to owners or investors of NFTs, sometime ago there was a speculation that the United States is trying to regulate the ownership of NFT's in which this news was false and the implication of not been regulated is that it can be owned by anyone and transactions could be done with anyone at any time.

---

What are the solutions to the limits of NFT development?

---

NFT does not have a stable Marketable value, the price always depends on the owner of the NFT and this can be solved through building NFT on blockchain.

NFT support intermediary, which is a kind of setback for NFT, the only preferred solution I can recommend is to make it totally intermediary free.

People still don't have much trust on NFT's because of its instability. If NFT can be bought and sold on popular crypto exchanges it will have more attention.

NFT should be able to swap with other cryptocurrency, if this is implemented it will give the NFT ecosystem more trust and popularity.

Some regulations should also be put in place so that scammers will not have their way, since there's no rule.

---

CONCLUSION

---

NFTs are becoming increasingly popular and it is only advisable for anyone who can to follow it up and invest reasonably. I have really learnt a lot about NFTs and how the whole secured and non-fungible idea works. I have also learnt how to create an NFT as I created my first ever NFT. Great contest idea from the @@@crypto-academy team, I am sure it has enlightened those of us that participated on what NFTs really are and how it works.

---

Thanks so much for reading, I hope you have learnt a thing or tow about NFTs too.

---

I would like to invite my friends @kennydavebobo, @olawole111, @ojerindejoel, @ngoenyi, @badmus-official to participate in this contest too.