Introduction

The birth of Bitcoin introduced the concepts of trustlessness and digital scarcity. Before this, the cost of reproducing something digitally was next to nothing. With the advent of blockchain technology, programmable digital scarcity has become a reality, allowing us to map the digital world to the real world.

Non-fungible tokens (NFTs), often referred to as "cryptocurrency collectibles," take this concept even further. Unlike cryptocurrencies where all tokens are created in batches, non-fungible tokens are produced in limited quantities and each one is unique.

Non-fungible tokens (NFT) are an important part of the new digital economy based on blockchain. Currently, many projects are experimenting with NFTs for a variety of use cases, including games, digital identities, licensing, certificates, and artwork. What’s more, they even allow ownership of high-value projects to be divided.

Nowadays, the issuance of NFT is becoming easier and easier, and "freshly released" NFTs are launched every day. In this article, we will introduce NFT and its uses in detail, and also analyze the "CryptoKitties" game that caused the congestion of the Ethereum blockchain in late 2017.

What is a non-fungible token (NFT)?

Non-fungible tokens (NFT) are also a type of cryptographic token in the blockchain, but the assets they represent are unique and can be either completely digital assets or reality. A tokenized form of an asset. Because NFTs are not interchangeable, they can be used to prove authenticity and ownership in the digital realm.

Fungibility means that the individual units of an asset are interchangeable with essentially no difference. For example, each unit of a fiat currency is interchangeable with other units of equal value and is therefore fungible. A ten dollar bill is interchangeable with any other dollar bill of equal value. This is also an indispensable and important attribute of currency as a medium of exchange.

Fungibility is a popular property of money that allows it to be freely exchanged. And theoretically, it is impossible to verify the hands of each currency unit. But when it comes to collectibles, this quality is no good.  

What if we could create a digital asset similar to Bitcoin, but give each unit a unique identity? In this way, each unit becomes unique (i.e. non-fungible), which is the essence of non-fungible tokens (NFT).

How do non-fungible tokens (NFTs) work?

Currently, there are many frameworks used for the creation and issuance of NFTs. One of the best is ERC-721, a standard for issuing and trading non-fungible assets on the Ethereum blockchain.

The standard was recently upgraded to ERC-1155. It allows both fungible and non-fungible tokens to be included in a single contract, creating more possibilities. The standardization of NFT issuance brings strong interoperability, ultimately making users the beneficiaries. This basically means that unique assets can be transferred between different applications with relative ease.

Binance Smart Chain (BSC) has exclusive NFT standards: BEP-721 and BEP-1155. The functions of both are similar to the previously mentioned Ethereum standard, but the cost is significantly lower than that of Ethereum, thus attracting many creators to mint NFTs.

If you need to store NFTs or get a glimpse of them, you can use Trust Wallet. Like other blockchain tokens, NFTs are also stored at addresses. It’s worth noting that even the issuer of an NFT cannot copy or transfer it without the owner’s permission.

NFT can be traded on open markets, including Treasureland, BakerySwap and Juggerworld of Binance Smart Chain (BSC), as well as OpenSea of Ethereum. Such marketplaces connect buyers and sellers, and the value of each token is unique. As the supply and demand relationship changes in the market, the price of NFT also rises and falls.

Where does the value of these tokens come from? Like other items of great value, value is not an inherent property of the object itself, but rather the subjective opinion of those who value it. Values are, at their core, accepted perceptions. Whether it is legal currency, precious metals or high-end cars, their value comes from public recognition. This is where the value of every valuable item comes from, so why not digital collectibles?

Use of non-fungible tokens (NFT)

Non-fungible tokens (NFT) ) can be used by decentralized applications (DApps) to launch unique digital items or cryptocurrency collectibles. These tokens can be highly valuable collectibles, investments, or other items.

The game industry has a long history. Some online games have already built their own economies, and using blockchain to tokenize game assets is just another step forward. In fact, using NFTs has the potential to solve or alleviate many of the inflation problems common in games.

As the virtual world flourishes, NFTs have also made exciting progress, beginning to tokenize real-world assets. These NFTs can represent fractional ownership of real-world assets, stored or traded in the blockchain network in the form of tokens. This approach can inject vitality into illiquid markets such as art, real estate, and rare collectibles, bringing much-needed liquidity.

Digital identity is another area that can benefit from NFT attributes. Storing identity or ownership data on the blockchain will greatly improve privacy and data integrity, benefiting users around the world. At the same time, the ease and convenience of transferring assets in a trustless manner can also reduce friction in the global economic environment.

How to make NFT?

Many cryptocurrency platforms and NFT trading platforms provide services for minting personal NFTs on Binance Smart Chain (BSC) or Ethereum, and the process is simple and convenient. The first step is to pay a certain amount of cryptocurrency as a minting fee and select the items that need to be converted into NFTs. Then choose whether to mint the NFT on Ethereum or Binance Smart Chain.

From a historical perspective, Ethereum is the starting point for the birth and development of NFT. Ethereum has a huge user base and the NFT community is mature, but transaction fees are high, which increases the burden on users to carry out small-scale sales and transactions. Although Binance Smart Chain (BSC) is a rising star in the blockchain field, its NFT market is booming and its prospects cannot be underestimated. Transaction fees are also cheaper.

Please read our How to Make Your Own NFT guide to learn more about the process of converting creative works into non-fungible tokens.

How to buy NFT?

As mentioned above, if you need to purchase non-fungible tokens, the NFT market should be your first choice. However, this little information is far from enough. NFTs cannot be purchased directly via credit card or PayPal. Having a cryptocurrency wallet and pre-depositing some cryptocurrency is key to the buying process.

Binance Smart Chain NFTs are usually priced in Binance Coins, while Ethereum NFTs use Ethereum (ETH). Both cryptocurrencies are available for purchase on the Binance exchange. Once you have purchased your chosen cryptocurrency, transfer funds to your wallet to interact with the NFT market.

Binance Chain Wallet and MetaMask are two high-quality browser plug-in wallets, both of which can be associated with the NFT market. Simply transfer cryptocurrencies from Binance to your wallet, then visit the market’s website and link the wallet (the link button is usually located in the upper right corner of the page). Beware of fake or suspicious websites. Please check the URL carefully. If you use it frequently, it is recommended to add it to your bookmarks.

If you prefer a mobile experience, you can choose Trust Wallet. Not only does it work on iOS and Android devices, it also supports multiple blockchains. Don’t forget, interacting with Ethereum and Binance Smart Chain (BSC) is not free! Some cryptocurrency must be deposited to cover transaction fees.

The story of "CryptoKitties" and Ethereum 

"CryptoKitties" (CryptoKitties)" is one of the first high-profile NFT projects. The game is built on the Ethereum network and allows players to adopt, feed and exchange virtual cats.

Each CryptoKitty has different attributes such as age, breed, and coat color. Therefore, each cat is unique and cannot be interchanged. They are also indivisible, so CryptoKitty tokens cannot be split into parts (similar to Ethereum’s Gwei).

When it was first launched, "CryptoKitties" attracted a large number of highly active users on the network, causing congestion on the Ethereum blockchain, thus earning some notoriety. It was estimated that in December 2017, these cat collectibles accounted for 25% of Ethereum traffic. It’s clear that the game did have a huge impact on the Ethereum network, but other factors such as the initial coin offering (ICO) boom also contributed to the situation.

"CryptoKitties" is not a currency, but a form of leisure and entertainment game, which creates an interesting blockchain use case in this regard. In total, these virtual cats have generated millions of dollars in capital flow, and some rare cats have been sold for hundreds or even thousands of dollars.

Popular projects using non-fungible tokens (NFTs) and digital currency collectibles

Currently , many projects using NFT as collectibles and tradable items have emerged in the market. We have selected a few of the most popular projects to introduce.

Decentraland

Decentraland creates a decentralized virtual reality world where players can own and exchange virtual land and other in-game NFTs thing. Cryptovoxels is a similar game where players can also build, develop and exchange virtual assets.

Alchemy Toys

"Alchemy Toys" is a Binance Smart Chain (BSC) game. NFTs represent various toys with unique serial numbers. Players can choose to collect these toys in the form of NFT, create more advanced toys through synthesis, or sacrifice (destroy) them to the gods. These toys can be traded and therefore have financial properties, opening up a relevant market for games.

In order to win the game, players must collect 127 toys and "sacrifice" them, and finally "obtain the oracle." The first player to "get the Oracle" in each round (epoch) will receive a share of the Temple Treasure (paid in Binance Coins).

PancakeSwap

PancakeSwap is the automated market making with the largest trading volume in Binance Smart Chain (BSC) business, while owning the most popular NFTs. The project will distribute cute rabbit collectibles to platform users in the form of gifts and competitions, some of which are pure decorations, and the other part can be used to exchange for the platform's native token CAKE.

Gods Unchained

Gods Unchained is a digital collectible card game in which the cards are issued in the blockchain in the form of NFT. Since each digital card is unique, players can collect or exchange it with each other just like having physical cards.

《Cryptopunks》

CryptoPunks are collectible works of digital art, each one shaped by A unique 8-bit style NFT character. The project was the inspiration for the ERC-721 token standard and a pioneer of the cryptocurrency art boom. Since then, many CryptoPunks have been sold for millions of dollars, promoting the emergence of similar projects around the world.

My Crypto Heroes

My Crypto Heroes is a multiplayer role-playing (RPG) game. Players can upgrade historical heroes through missions and battles. Various heroes and in-game items are issued in the form of tokens on the Ethereum blockchain.

Binance Collectibles and NFTs

Based on the user’s activities on the platform, Binance will Issue NFT to them in the form of special gifts. Whether trading contracts or Pizza Day NFTs, users will regularly receive tradable Binance collectibles.

Binance Collectibles is another example. This type of collectible is an NFT jointly launched with Enjin. If you want to experience this game and get NFT, please follow Binance’s Twitter account and look forward to the next giveaway event. If you wish to participate in the NFT gifting activity, please follow the steps below:

1. Download a wallet that supports Ethereum (such as Trust Wallet).

2. Copy the Ethereum address and provide it to the organizer according to the gift rules. You may need to submit via a form, or as a Twitter comment. In order to successfully participate in the event, please read the relevant rules carefully.

3. When you win NFT and the organizer distributes the prize, you can view it through the "Collections" tab in the Trust Wallet wallet. After that, you can choose to hold it or trade it on the P2P market platform.

The Binance NFT Market is an excellent platform for users to mint and trade their own original NFTs. Here are gathered NFT works exclusively launched by well-known creative people around the world, including musician Lewis Capaldi and cryptocurrency artist Trevor Jones. The platform will also pay royalties to creators based on subsequent sales in the market.

Crypto Stamp

Crypto Stamp is a project issued by the Austrian Post Office, hoping to build a bridge between the digital world and the real world. These digital stamps can be used for mail delivery and perform the same function as physical stamps. They can also be stored on the Ethereum blockchain as digital images, thus becoming tradable digital collectibles.

Summary

Digital collectibles open to blockchain technology A brand new door that is no longer limited to the traditional financial field. NFT represents a tangible asset in the digital world and is likely to become an important part of the blockchain ecosystem and even the broader economy.

NFT has many use cases, attracting many developers, leading this emerging technology to continuously innovate.