What are NFTs, FTs and Digital Assets?
A simple introduction to NFTs and digital assets — explained for beginners.
Over the past few weeks and months, the word “NFT” has cropped up more times than ever before. You’ve probably heard about it from friends, family, social media, influences or even artists — everyone is talking about it and it’s suddenly becoming unmissable.
So why wait anymore to find out what this all means?
A Non-Fungible token, abbreviated as an NFT, abbreviated is a one-of-a-kind digital asset. A shield, a sword, a piece of art, a coupon code — you name it, it can be anything you imagine.
They are unique, therefore cannot be duplicated, and are unchangeable as they are stored on the blockchain. You have full ownership over the asset.
They might look the same to you, but under-the-hood (within the metadata) they are different thus providing value to you for their uniqueness.
However, often neglected with the recent “NFT craze,” it’s important to also learn of the other type of tokens: the Fungible Token (FT).
A Fungible token is the complete opposite of a Non-Fungible token. What you know and have learned about with an NFT, it’s mostly the opposite for a FT.
Fungible tokens are the same, they never differ and they will always copy the other. They share the same properties, metadata and information.
As this is something that can be difficult to understand without a visual representation, let’s have a look at how a Fungible and Non-Fungible token looks like and understand the differences between them. It can be tricky to understand when it doesn’t physically exist.
Non-Fungible Tokens
Non-Fungible tokens are all unique and therefore different. Yet, they might look the same to you. A clear difference is the token index (#). Each digital token that‘s created, whether an art piece; digital game item; or proof of authenticity, they are all stored on the blockchain and accessible only by the person who owns the token.
Fungible Assets
Fungible tokens are all the same and therefore can be ‘stacked’. You can own hundreds and they will always be the same. As per the screenshot above, there are 10x of the same asset, all exactly the same and thus interchangeable.
How do you create your own Digital Assets and How do you Collect them?
Creating your own Non-Fungible token used to be an incredibly tricky process. However, in the past few years the technology has been evolving rapidly and the barriers to entry is significantly lower — unlocking this incredible technology for use by everyone. It only takes a few minutes to do and you can create your own digital tokens on the blockchain.
In terms of how I created my own, digital, Non-Fungible token (for various art pieces, as seen in the screenshots above) I used the Enjin Platform which allows you to create anything you want with the click of just a few buttons.
With the Enjin Platform, you can set-up your own customised project and begin creating your own unique digital assets on the blockchain — forever there and secured safely. You’ll never need to worry about the tokens as they are hard-coded in with specific rules that ensure you never lose your precious digital assets.
Digital assets can also mean value. They are able to hold real importance. When you create a digital asset with monetary value, this symbolises importance and holds a profit. An asset can ‘hold’ or be ‘backed by’ a {x amount} of a token or coin.
This process is similar to storing your tokens or coins into an asset, you are embedding your coins and storing them safely into a digital asset. This allows for authenticity of an asset and proves the origin of the digital asset.
The first Multi-Token Standard, ERC-1155, allows for both NFTs and FTs to be created; minted; and distributed together — even in the same transaction. This give you complete control of the assets you create and in a faster, cheaper, manner.
So, how do you grab some digital assets?
Digital asset marketplaces have increasingly become more and more popular. They are in high demand as it allows individuals (and businesses) to sell, auction and purchase digital assets. Marketplaces such as the Enjin Marketplace, Rarible or Opensea are often receiving traction amongst traders and eager NFT hunters to acquire some of the latest and/or rarest NFTs. From art pieces; gaming collectables; trophies; or digital cards, they are all there and accessible for anyone to sell and purchase.
Now you know in very simple terms what Non-Fungible tokens and Fungible tokens are, along with the process to create them.
Now what do I do? 🤔
Explore what you can do with this new technology and how you can change the world. Keep on learning and exploring the depths of how you can contribute to this new wave of digital assets. Blockchain technologies and Non-Fungible tokens are becoming more and more mainstream and are becoming increasingly popular — jump in the community and begin creating something of your own vision and idea.
