NFT stands for Non fungible token. The term “fungible” is used in financial and property law to refer to something that can be exchanged for money or another item of the same type. When we say a currency is fungible, it means that all the units are worth and indistinguishable from each other for brand building. For example, US dollars are considered indistinguishable because they’re worth the same and interchangeable with one another
Few of the common questions are:
1. Why do we need non fungible tokens?
The answer is simple, the NFTs which you can own always have a history and stored data. This makes them different from other tokens and ordinary cryptocurrency. ERC-721 is a token standard for Non Fungible Token(NFT) which uses Ethereum’s blockchain for the Proof of Authority (PoA). These tokens can represent any tradeable asset like Cryptocurrencies, land deeds, house ownership, artwork etc. ERC721 makes it possible to create unique tokens on Ethereum blockchain
2. What are NFTs used for?
Crypto Kitty is one of the simplest examples of using NFTs in an interactive way/game. Crypto Kitties are ERC-721 tokens which can be bought and sold. These unique digital kittens are stored on the Ethereum blockchain and can be used to collect, breed, buy, sell and trade.These digital kitties have special characteristics like: Find here.
- Each cat is unique
- Non-Fungible tokens cannot be counterfeited because of their non-reproducibility.
- There is a limited supply of cats available on CryptoKitties platform. Only 4 billion cats will ever exist there.
You can also use NFTs for:
- Investing in trading of property assets or just collecting them as an investment asset.
- Building & maintaining collective ideas and milestones.
- Creating and designing items.
- Real estate market.
- Art & collectibles trading: You can exchange your works for non-fungible tokens which you can use in future for online purchase or trade on other platforms.
3. How do I buy NFTs?
You can buy and sell NFTs on decentralized exchanges like IDEX and ForkDelta as well as PoA based exchanges like Ontology, Kyber Network, Airswap etc .NFTs are recently getting attention from the enthusiasts of Trading platform like Binance, OKEx etc .
4. How do I create NFT in Ethereum?
The PoA based standard ERC721 can be used directly with the Ethereum blockchain to create non fungible tokens .
5. How to use NFT?
Non Fungibles are created using ERC721. These are owned and controlled by an Ethereum address and can be transferred anywhere in the world instantly for outreach.
6. How does ERC721 work?
The 721 in the name stands for the 7 properties describing various virtual items,such as uniqueness, ownership, divisibility, transferability etc . Non fungible tokens follow a set of standards based on ERC-20 token but with some extra functions added to it . The standards follow are:
- A totalSupply function which returns the total number of tokens available for usage.
- balanceOf function which returns balance of a particular user address.
- transfer function which allows to transfer tokens between 2 user accounts
- tokenFallback function which allows it to be used by any contracts or users who do not have upgradable ERC721 support. Non fungible tokens are divided into two states, active and inactive. A non fungible token can only be in one of two states; active or inactive. This is a major criticism of the standard because it means that a non fungible token once created cannot later be moved into the inactive state over time. To move a non-fungible token from the active state to the inactive state, another transaction needs to be made using another ERC-721 compliant contract .
7. Where can I find Non fungible tokens?
Ethereum network can use ERC721 tokens and support the standard. The non fungible tokens are approved by the ERC-721 token creators. They need to be either created by the creator himself or sold on a decentralized exchange for other users to purchase . For example, [CryptoKitties](https://www.cryptokitties.co/) is a platform built on Ethereum blockchain which contains non fungible tokens which can be used in future for purchase or trade .
8. What are the key takeaways?
Non fungible tokens are the new way of doing business. The use cases of NFTs(Non fungible token) is immense and it can be used in real estate, art & collectibles trading, investing in trading of property assets or just collecting them as an investment asset and much more.
Most importantly, there is a limited supply of cats available on CryptoKitties platform. Only 4 billion cats will ever exist there.
9. What is the difference between NFT and ERC721?
The term “fungible” is used in financial and property law to refer to something that can be exchanged for money or another item of the same type . When we say a currency is fungible, it means that all the units are worth and indistinguishable from each other. For example, US dollars are considered indistinguishable because they’re worth the same and interchangeable with one another.
Bosworth said fungibility is the quality that makes a good or asset easily interchangeable with other individual goods or assets of the same type. In other words, a dollar is still a dollar, even if it was previously used to buy something else.