Non-Fungible Tokens, or NFTs for short, are types of cryptographic assets that possess distinctive characteristics that make them unique. Naturally, because of this, NFTs are not interchangeable as unique values cannot be transferred at a 1:1 value with something else. This is where the title “non-fungible” comes from and this means that NFTs are great ways of representing unique digital assets.
In this article, we will be exploring what non-fungible tokens are, what makes them different from typical cryptocurrencies, what the greatest use cases for NFTs are and why developing non-fungible token technology on the Gear Network is a perfect way of contributing to building the future of the internet.
The main difference between non-fungible and fungible tokens is that while fungible tokens are interchangable , non-fungible tokens are not. Fungibility is the ability of an asset to be interchanged with another asset at the same time. For instance, a five dollar bill can be interchangeable with five one dollar bills. However, as NFTs possess unique properties, they cannot be interchanged with other NFTs organically. Instead they can only be traded at a value that both the buyer and seller deems acceptable.
In recent years, we’ve seen interest in non-fungible tokens boom as they empower creators to retain more power and control over their work than ever before. But it isn’t just content creators that have been leveraging the potential of non-fungible token technology. In fact, NFTs can be used to digitally represent any unique asset whether said asset is digital or not. This means that NFTs would make for great ways of representing high value items like deeds to a house, car and other motorized vehicle ownership and expensive high-value items like watches and collectibles for example. What’s more, thanks to the way that blockchain technology works, NFTs are ideal, safe and secure ways of representing ownership as no one can modify them once they’ve been created and no one can forge or bring unauthentic NFTs into existence.
NFTs, just like fungible tokens, are powered by smart contracts which are essentially just lines of code that determines how said token should work. This process of tokenization has tremendous potential to transform the landscape of traditional asset and financial markets and it will help to create a global financial ecosystem where almost anything can be traded as easily as typical fungible cryptocurrencies can. This will ensure that traditionally illiquid assets, like real estate, intellectual property and art for example can now be traded anywhere and at any time.
On top of that, NFTs introduce brand new opportunities within the economic sphere. For instance, NFTs enable businesses to offer products and services that retain their value and that can be openly traded on secondary markets. Not only does this ensure that businesses can benefit from royalties from secondary sales and that customers can regain their initial investment for said product or service, but it also means that a new customer can benefit from said product or service too. This is revolutionary.
NFTs are also fantastic ways of proving ownership authenticity, whether that be proof of purchase, proof of membership or proof of intellectual properties. This means that NFTs can be used globally as receipts, memberships or rights to trademarks, domains, copyrights or any other form of intellectual property. NFTs can even represent essential personal information, such as birth certificates, passports, academic achievements and death records in secure, efficient and most importantly, digital ways.
As a platform that enables developers to create smart contracts on Polkadot, one of the most fast, effective and innovative blockchains in the world, Gear naturally enables developers to create non-fungible tokens and programs based around non-fungible token technology too. This means that as we progress into a world that becomes dominated by Web 3.0 technologies, Gear is one of the best places to build multi faceted non-fungible token solutions.
Gear wants to make it possible for developers to bring their decentralized solutions to the web, without compromising on performance, to enable their solutions to achieve full performance and a full set of capabilities just like they would if they were running natively as applications on Windows or Mac.
Gear has many advanced features such as cross-program interaction based on the Actor Model, async program execution, the opportunity to create programs with other programs and a flexible program life-cycle. Being an independent platform with development “from scratch” and not using any built-in smart contracts running pallets, the Gear Network separates itself from competitors as it puts a much greater emphasis on lowering the barrier to entry for blockchain development to help introduce pools of talent that are currently “locked out” of the industry due to a lack of knowledge and experience with blockchain development.
To see more technical explanations, as well as NFT smart contract examples, then please head on over to our Wiki where you can take a look at multiple different implementation examples and options. Our Wiki is a great place to take a deeper look into what’s possible on Gear!
We hope that this article has helped introduce you to the concept of non-fungible tokens, how they differ from traditional cryptocurrencies and why the Gear Network is the ideal place to develop non-fungible token technology.
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The Gear Team
