Currently worth $100 million, the nonfungible tokens industry is changing how the ownership and authenticity of digital assets are perceived. Leading entities in the gaming and blockchain world are already experimenting with NFTs in all sorts of ways. However, the primary goal is to prove the authenticity and ownership of digital items, which had proven difficult until the advent of blockchain technology.
Through blockchain technology, digital assets can have unique identifiable attributes that make them rare and irreplaceable. On NFT marketplaces such as OpenSea, a multitude of projects are at work producing all sorts of creative and transferable NFT items.
While the past decade has seen a lot of excitement around fungible digital assets like Bitcoin (BTC) and Ether (ETH), nonfungible tokens are just getting started, and already, there is a lot of progress to write home about.
A quick NFT primer
While a fungible token like Bitcoin is indistinguishable from and replaceable with other tokens of its kind, a nonfungible token is distinguishable from other tokens and cannot be replaced or substituted.
A bank note in a wallet, for instance, can easily be lent out and replaced with another one. The person that takes the loan does not necessarily have to give back the same bank note. That banknote is, therefore, a fungible item replaceable by another of its kind in a one-to-one ratio.
However, when buying a unique piece of art or a plane ticket, it is impossible to get the same value if the item is exchanged for another — assuming those items are unique. Therefore, a plane ticket that gives you the right to a seat in standard class on a flight to location A is not the same as a ticket that lets you board a private jet to location B.
Blockchain makes it possible to own NFTs in the digital world, similar to how anyone would own a baseball card in the physical world. These digital assets can be stored on the blockchain and be transferred from one owner to another without the…