NFT’s on BamChain
Dear readers, followers, and the ones who are passionate about BTCBAM, one phrase attracted us so deeply and this word has kept our team busy. The word is on-Fungible Tokens the other way around is NFT.
All eyes of the crypto sector are focused on this word and pursued their work around 3 letters.
The potential of blockchain technology is much more than cryptocurrencies. It will enable people, companies to put IDs, certificates, real estate data and other important information of the real world assets on the blockchain. Right now, this is what is causing a lot of buzz. Imagine having your diploma issued on the blockchain as a digital document that is recognized by all authorities around the world — no need to translate, notarize, verify it. While everyone is talking about this, how can this actually be done? The technology which made that possible are non-fungible tokens and we believe they are the future of the blockchain economy. Let’s talk about the difference between the present, fungible tokens, or simply put Cryptocurrencies and the future, non-fungible tokens or Digital certificates.
What are Fungible and Non-Fungible Tokens
- Fungible Tokens
Due to decentralization, security, immutability, Blockchain is considered to be the perfect technology for managing all types of digital assets. But with such interchangeable tokens, this would not be possible. Such tokens work fine for cryptocurrencies, and in fact, fungibility is the fundamental feature of any currency.
Such tokens are built in such a way that each fraction of a token is equivalent to the next. For instance, Bitcoin, the most popular cryptocurrency, is fungible, which means one Bitcoin is equal to one Bitcoin, and it’s equal to all other Bitcoins. Such tokens are assumed to be interchangeable and divisible too.
In simpler words, these are types of cryptographic tokens that are basically identical or uniform and can be interchanged with other fungible tokens of the same type without any issues. Such tokens relate to the things we use every day, and it applies to real-world well as digital assets.
- Non-Fungible Tokens
Non-fungible tokens are special tokens that represent unique, collectible items. They are unique in the sense that they cannot be split or exactly changed for other non-fungible tokens of the same type. You can consider NFTs as tokens with no fungibility that offer a variety of unique opportunities for using blockchain technology. Crypto Kitties is the most popular example of non-fungible, collectible tokens.
Every CryptoKitty is unique, and no two CryptoKitties are the same; these are impracticable to break a CryptoKitty into smaller pieces, trade them, and reassemble them to create an equally valuable CryptoKitty, unlike fungible assets like Bitcoin.
As the OpenSea mentions;
What is a non-fungible token?
Non-fungible assets are just normal stuff. Fungible assets are the odd ones out!
Most discussions about non-fungible tokens begin by introducing the idea of fungibility, which is defined as “able to replace or be replaced by another identical item”. We think this overcomplicates things. To get a better sense of what might constitute a non-fungible asset, just think about most of the stuff you own. The chair you’re sitting in, your phone, your laptop, anything you could go and sell on eBay. All of these fall under the category of non-fungible things.
It turns out that fungible assets are actually the odd ones out. A currency is a classic example of a fungible asset. Five dollars is always five dollars no matter the serial number on the specific five-dollar bill, or whether its five dollars sitting in your bank account. The ability to replace a five-dollar bill with another five-dollar bill (or five ones, for that matter) is what makes currency fungible.
Note that fungibility is relative; it really only applies when comparing multiple things. Consider business class, economy class, and first-class flight tickets. Each ticket is roughly fungible within its class, but you couldn’t fairly swap a first-class ticket for a business class ticket. Even the chair you’re sitting in is roughly fungible with a chair of the same model, unless you’ve developed a special attachment to your particular chair.
Interestingly, fungibility can also be subjective. Back to the flight ticket example: a person that cares about sitting in a window seat vs. an aisle seat might not consider two economy class tickets interchangeable. Similarly, a rare penny might be worth 1 cent to me but worth much more to a coin collector. We’ll see that some of these nuances become important when representing these items on blockchains.
How Does an NFT Work?
NFTs exist on a blockchain, which is a distributed public ledger that records transactions. You’re probably most familiar with blockchain as the underlying process that makes cryptocurrencies possible.
Specifically, NFTs are typically held on the Ethereum blockchain, although other blockchains support them as well.
An NFT is created, or “minted” from digital objects that represent both tangible and intangible items, including:
• Art
• GIFs
• Videos and sports highlights
• Collectibles
• Virtual avatars and video game skins
• Designer sneakers
• Music
Even tweets count. Twitter co-founder Jack Dorsey sold his first ever tweet as an NFT for more than $2.9 million.
Essentially, NFTs are like physical collector’s items, only digital. So instead of getting an actual oil painting to hang on the wall, the buyer gets a digital file instead.
They also get exclusive ownership rights. That’s right: NFTs can have only one owner at a time. NFTs’ unique data makes it easy to verify their ownership and transfer tokens between owners. The owner or creator can also store specific information inside them. For instance, artists can sign their artwork by including their signature in an NFT’s metadata.
This isn’t money, but it could cost you
Like bitcoin, non-fungible tokens rely on the decentralized power of blockchain technology to verify their authenticity. But unlike bitcoin, they’re not interchangeable. You can’t swap any old NFTs for a car or a pizza, because each NFT is attached to a specific digital asset — a coupon, a piece of art, a collection of trading cards.
Every bitcoin has the same value at the same time. Not so with NFTs. In short, think of an NFT as a unique, digital version of a certificate of authenticity, publicly rubber-stamped by the blockchain.
Some investors are betting big on the NFT marketplace and NFT art, hoping their value will soar. Others are buying NFTs strictly for publicity, bragging rights, or just to join a new community. Some proponents of NBA Top Shot admit that many of the video highlights it sells can be viewed anytime, by anybody, on YouTube. But they like belonging to the Top Shot community online, or they like the opportunity for an investment that could soar in price.
Why NFTs have value
The main question puzzling common folk is why would people pay for something they can watch, copy or download for free? The answer is simple — ownership. Anyone may look at a picture, but it has only one owner. Well, in the case of artworks, they remain the intellectual property of the author as well. However, the owner is the one authorized to use the work of art in any way imaginable. That’s the exact point of collecting rare items — having exclusive rights to utilize and admire them.
Moreover, NFTs are not only used for digital art. In-game items are also popular as tokens. Game characters, vehicles, buildings and spaces, ammunition, and any other piece of a virtual gaming reality can be sold. Whereas the game developers were the only owners of in-game items before, now the users can resell their unique gaming assets. NFTs make it legal and very safe. You shouldn’t worry about forgery and counterfeiting. Clear and transparent auditing mechanisms inherent to blockchain technology help to check any item’s authenticity. Hence, if you buy something as an NFT, nobody can claim it’s fake.
The scarce nature of NFTs and the high demand for them from gamers, collectors, and investors have created a lot of hype about tokens lately. People are finally starting to pay attention to the phenomenon which has existed since 2017. Moreover, they’re starting to pay real-world money for it.
Take a look at the world’s most valuable NFT’s
Beeple,Everydays- The First 5000 Days
$69 million, March 2021, Christie’s
CryptoPunk #3100 — $7.58 Million
CryptoPunk #7804 — $7.57 Million
The first Tweet — $2.9 Million
How an NFT works
Establish the NFT’s smart contract
Ownership of an NFT is usually managed by a smart contract, which allows the item to be exchanged on a blockchain network and stored in some cryptocurrency wallets, much like fungible cryptocurrencies can be exchanged and stored. The smart contract creates the rules of ownership and exchange, including the possibility to have a percent of proceeds from the sale of the NFT to be retained by the creator in perpetuity (similar to music royalties).
Mint the NFT
The token representing the non-fungible item is issued on a blockchain via a smart contract, referred to as “minting” an NFT. Most creators — particularly those less familiar with blockchain technology — use a platform such as OpenSea, Rarible, SuperRare, or one of many more. These platforms allow creators to mint NFTs without needing the technical expertise required to manage smart contract code deployment.
Sell the NFT
Most creators sell their NFTs from the same platform where they mint it. As the unchangeable record of the NFT’s origination and ownership is recorded on a public blockchain, the authenticity and originality of the non-fungible item can be easily traced.
You will have a chance to develop your own NFT projects on BamChain, So start creating NFT ideas until the platform opens!
