Non-fungible tokens (NFTs) have been taking over DeFi and gaming – and for good reason. These tokens stand out from other digital assets like cryptocurrencies in quite a few ways, making them uniquely well suited for usage in virtual ecosystems and environments.
First, to understand NFTs, we look at the name. An NFT is a digital token, but it is not fungible – meaning that it is not interchangeable with other assets of the same type. In contrast, fiat and cryptocurrencies are fungible – you can interchange one $10 bill for another, or 1 ETH for another, and it will have the same exact value and utility, despite it being a different asset with a different identifying number/code. Therefore, NFTs are unique from each other, even if they are within the same group or collection, and are not interchangeable.
In fact, NFTs stand out from other digital assets in three major ways: they are unique, rare, and indivisible. As we have pointed out, and as the name states, NFTs are unique from one another. Because of the metadata of this asset, it cannot be interchanged with another NFT, even if it is from the same platform – they represent different things, such as different digital artworks. NFTs also stand out by being rare, as a result of their uniqueness. This provides them with a high value, and makes them appealing as collectable items. Finally, NFTs are indivisible. While dollars can be divided into cents and ETH and other crypto can be split down to the decimal level, NFTs cannot be broken down into smaller pieces.
These three primary characteristics also endow NFTs with quite a few benefits. They represent ownership, and cannot be taken away from users – unlike how many other digital platforms can take digital items and ownership away from users. Further, they are exchangeable on digital marketplaces, meaning that users can derive value from them by selling. NFTs are also authenticated and protected against fakes, thanks to the security of their blockchain basis, meaning the chance of fraud is eliminated, ensuring the maintained value and authenticity of NFTs.
Due to these characteristics, NFTs have gained popularity to represent things beyond simple underlying traditional assets. While fiat currency may be backed by precious metals and crypto is usually backed by the holding company’s assets, NFTs generally represent something less traditional. NFT use cases can still include real world assets, but also involve representing achievements, event tickets, in-game items and power-ups, and virtual collectibles. Since they are so optimally suited to digital ecosystems, they have become a major force in DeFi and gaming.
Because AnRKey X unites these two fields, NFTs are able to provide a vast array of important and impactful uses on our platform; these cutting-edge tokens act to memorialize in-game achievements, reward users, represent boosts, display animated artworks, and provide users with genuine value.