Non-Fungible Tokens and the Crypto Marketplace
Non-Fungible Tokens and the Crypto Marketplace
NFTs (or non-fungible tokens) are increasingly becoming more important in the crypto space, and it’s easy to see why. NFTs have many unique advantages that can make crypto games and NFT marketplaces fun, secure, and profitable for everybody involved. Not sure what all the fuss is about? Read on to find out more about the benefits of NFTs and how they’re affecting the crypto marketplace in 2019.
What are non-fungible tokens?
Non-fungible tokens, or NFTs, are blockchain tokens that possess unique and distinguishable features from one another. Most digital tokens on crypto marketplaces are fungible: they can be freely exchanged for each other without losing their value. Because of their unique characteristics, however, NFTs are often highly desirable in business settings. If a non-fungible token represents a physical product like real estate or collectibles (like an artwork), businesses can easily distribute these assets to customers using blockchain technology instead of relying on third parties like banks. The ability to purchase and trade physical assets using crypto could revolutionize e-commerce as we know it. However, developing a marketplace for NFTs is a complicated endeavor that requires investors to evaluate several factors before taking any action. Before buying into any ICO, it’s important for investors to understand how things work within their target ecosystem. Otherwise, there’s no way of knowing whether your investment will pay off.
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understanding non-fungible tokens: All crypto-collectibles are based on Non-Fungible Tokens (NFTs). Understanding what they are will make trading a lot easier. First, let’s go over what fungibility means. Fungibility is one of those words that’s often used but not so well understood. Let’s break it down: in economic terms, fungibility refers to any unit of currency that is interchangeable with other units of identical face value. In other words, no matter where you got a dollar bill or how you used it (whether to buy a pack of gum or to pay off your $20,000 credit card debt), its perceived value will be consistent across all exchanges. For example, if I were to deposit two one-dollar bills into my bank account today, I wouldn’t expect my balance to change at all tomorrow—even if I had only deposited a single bill yesterday. The concept of fungibility is pretty straightforward; it just ensures that each individual item within a given class has equal worth in relation to every other item within that same class. This idea probably sounds familiar; after all, most currencies adhere very closely to these standards. The U.S. Dollar isn’t really defined by physical characteristics like size or color—the minting process ensures their consistency throughout time—and instead relies on simple rules such as size and weight for denomination recognition and regulation around monetary creation/destruction through government policy changes.
Crypto marketplaces
The most pressing issues facing crypto marketplaces are those surrounding non-fungible tokens (NFTs). In short, an NFT is a digital token that cannot be divided into smaller tokens. Think of them as ownership certificates or tickets for an event. Cryptokitties, one of blockchain’s first major forays into non-fungibility, is built on top of Ethereum (ETH) to allow users to buy, sell, and even breed crypto kitties based on ownership information stored on their Ethereum addresses. This functionality has led many crypto enthusiasts to believe that NFTs are a necessary prerequisite for widespread crypto adoption. However, there remain several potential problems for any marketplace based around NFTs. Without delving too deep into code, these problems largely center around how such NFTs are priced and what happens when they become lost in transit between buyer and seller. Because of these issues, we do not recommend building an nft marketplace using ether (the cryptocurrency associated with ETH), at least not until these problems have been resolved by Ethereum developers. That being said, there are some other cryptocurrencies out there that could work well in building such a marketplace like Waves or EOS—just don’t use ETH until it can handle your needs adequately! Otherwise, you might find yourself wasting time trying to fix bugs only to discover you need big changes baked in from the start.
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How Can I Get Started?
If you’re looking to dive into NFTs, purchasing them from a third party is one of your few options. While there are companies that allow you to purchase non-fungible crypto assets in exchange for real money, like Rarebits, there aren’t many opportunities for purchasing other crypto items on marketplaces yet. The most notable exception is Decentraland, which has its own marketplace where users can buy digital plots of land in their virtual reality world. If you want an investment opportunity outside of Decentraland, however, you’ll have to participate in an ICO or wait until more products begin coming out that utilize NFTs as tokens. Since they haven’t been widely adopted at all so far, it could be a while before we see any major changes or partnerships. However, if you get involved early enough by participating in initial coin offerings (ICOs), you may see significant growth over time as blockchain becomes more prevalent worldwide. And when businesses begin incorporating blockchain technology into traditional business models—think Uber with tokens—there will likely be a surge of new projects utilizing non-fungible tokens. As with any new concept though, adoption isn’t certain and risks abound. Just remember to do your research thoroughly before spending any money on these platforms!
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