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01 Non-fungible tokens (NFT)

NFT stands for Non-Fungible Token, a digital asset built on blockchain technology. Unlike tokens in cryptocurrencies (such as Bitcoin or Ethereum), NFTs are unique, each one is unique and cannot be interchanged. This makes NFTs have special value in representing digital artworks, collectibles, game items, and other fields.

The uniqueness of NFTs comes from their metadata, which describes the properties and ownership information of the specific assets represented by the NFT. Through blockchain technology, the ownership of NFTs can be accurately recorded and tracked, so that the true ownership of digital assets can be guaranteed and can be traded and transferred between different platforms.

NFT has a wide range of applications, including digital artwork, virtual real estate, game items, music and video content, etc. For example, a piece of digital artwork can be encoded as an NFT and uniquely identified and traded on the blockchain, while virtual props in games can also be represented as NFTs and have unique properties and value. Typical cases include:

  • CryptoPunks: CryptoPunks are a set of unique 10,000 pixel artworks created in 2017, each CryptoPunk has a unique appearance and properties. They are one of the earliest NFTs on the Ethereum blockchain and are considered a representative work of digital art and collection.

  • Decentraland: Decentraland is a virtual world platform based on the Ethereum blockchain that allows users to buy, own and trade virtual real estate. Each piece of land exists in the form of an NFT with unique coordinates and properties, on which users can build virtual scenes and experiences.

  • Bored Ape Yacht Club: Bored Ape Yacht Club is an NFT collection of 10,000 unique ape heads, each with a unique appearance and attributes. Users holding Bored Ape Yacht Club NFTs can participate in club activities and community benefits.

  • The Sandbox: The Sandbox is a virtual world platform based on the Ethereum blockchain that allows users to buy, own and trade virtual real estate and game assets. Each piece of land and game asset exists in the form of NFT, with unique properties and functions, on which users can build game scenes and experiences.

  • NBA Top Shot: NBA Top Shot is a blockchain-based digital collection platform that allows users to collect and trade highlights and moments of NBA games. Each highlight clip exists in the form of NFT, with unique game and player information, and users can buy, own and trade these unique NBA moments.

02 Comparison between NFT and FT (homogeneous tokens)

  • Fungible Tokens:

  • A fungible token is a fungible digital asset where each token is identical and interchangeable with one another, just like real-world currency.

  • For example: Bitcoin is a fungible token because each Bitcoin has the same value and properties, no matter which address the Bitcoin is sent from.

  • Non-Fungible Tokens (NFTs):

  • Non-fungible tokens are unique digital assets, each of which is unique and non-interchangeable, representing a specific asset or content.

  • For example: The NFT of a digital artwork is a non-fungible token because it has a unique design, author, and history. Each NFT of a piece of artwork is unique and cannot be replaced by each other.

In general, fungible tokens are interchangeable and each token is identical, whereas non-fungible tokens are unique and each token has specific properties and value.

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