NFTs

The properties of each NFT ultimately depend on the smart contract that created it, as well as the blockchain network on which it was created.

NFT stands for ‘Non-Fungible Token.’ They are created through smart contracts and can be used for a wide range of purposes. The properties of each NFT ultimately depend on the smart contract that created it, as well as the blockchain network on which it was created.

Think of an NFT as a blank sheet of paper. In its most simple form, it is a tool. Just like paper, an NFT can be used for professional art, in-jokes with friends, or they can even be used to represent ownership of a connected asset in a similar way to how legal documents can represent ownership of a car or house.

Just like with those assets that are put on paper, what ultimately decides the value and/or usefulness of an NFT comes down to A.) the creator of the NFT, B.) the context of the NFT. When an NFT is created, the blockchain address of both the creator and the smart contract are indelibly linked with the NFT.

An imitation of a Picasso has extremely limited value compared to one created by the real artist (creator), despite many of the same materials used in its creation. Similarly, a fake degree might look nice, but digging into the school that supposedly issued it (context) will reveal it as fake.

This makes it simple to ensure the asset you're buying is legitimate - simply check the blockchain address against the creator's known address. If the NFT has utility, such as a video game asset, then the game (context) might be programmed to only accept NFTs created by official smart contracts.

On Ethereum, there are currently two NFT standards upon which most NFTs are built:

• ERC-721 | Non-Fungible Tokens

• ERC-1155 | Semi-Fungible Tokens OR Non-Fungible Tokens

Many people only know about art NFTs, but they can really be anything. Gaming is an area that I predict will see a major uptick in NFT usage soon.

The Sandbox Game, for example, is one of the metaverse games that's in progress. Many objects placed in The Sandbox Game are NFTs. Another example is Gods Unchained, a blockchain-enabled trading card game where all the booster cards are themselves NFTs.