Steemit Crypto Academy Contest / S2W4 - What are NFTs. by @fombae

Okay, this week is on NFT (non-fungible tokens), another form of cryptocurrency represented by a digital asset. The only difference here is that NFT assets are non-tangible items and hold a value. NFT are unique and can be used as a medium of exchange, even though one NFt can not replace another

Use your own words to define non-fungible tokens: NFT, and to show the difference between fungible and non-fungible tokens.

NFTs are digital currencies (like Bitcoin, Ethereum, and Steem) that represent a digital asset. NFT is operated on a blockchain network and can be transferred from wallet to wallet. NFT transfers are faster, secure, and easier to be verified since they are built on a blockchain network. As I mentioned above, they are unique from each other. Something about NFT is the fact they were made to store real-world value. Since they are unique, each NFT holds its value and gives them the description as Non-fungible.

There is just one technical difference, which is the fact that one is fungible and the other is non-fungible.

• When we talk of fungible for example, is the fact that when you transfer 1 BTC from A to B, you will have 1BTC in B wallet. Another case is the local currencies we use to make purchases are fungible(that is breaking $100 to $10 (10 x 10) still leaves you with 100 in your hands.)

• Non-fungible is different from fungible in that it can not be a swap or split into equal parts, meaning trying to retain the same value. I did say, each NFT is unique, so permit the owner to store the asset in a digital form. NFT represents a digital asset that an author has created, such as a painting, house, car, etc, that holds the value of the asset. NFT can represent anything that has value and can be verified through a unique transaction hash.

Are NFTs interchangeable? What are the differences between an NFT and other currencies? Is there an NFT marketplace? And how to invest in NFTs?

• Are NFTs interchangeable?

Well, technically NFT can not be interchangeable. NFT runs on the blockchain like other cryptocurrencies, but can not be interchanged because of their unique nature. In the case of BTC, where you can change one for another and still have the same value. NFT will not be possible, you can only find a case where more than one NFT is put together to swap for another with the approval of the owners. Note, putting together more than one is finding a way to have the same price as the other.

On the other hand, NFT can be sold and not swapped due to the uniqueness of their properties from each other. We can only have only one NFT, making them have no tangible form. No matter how similar you think an NFT asset looks, they each have a unique identifier making it completely difficult to be interchangeable.

• What are the differences between an NFT and other currencies?

NTF	Other currencies
Represent a digital asset	Standalone
Unique identifies	No unique identifier
Can not be interchangeable	interchangeable
Non-fungible by nature	Naturally fungible
Hold back the future of finance	it is the future of finance(crypto)

• Is there an NFT marketplace?

Sure, just like any other digital currency. It has a marketplace, where we can do some exchange deals in trading NFTs. Here you will find a good number of serious art, established by artists which can be sold at a flat rate or at auction. Some of the marketplaces are

• OpenSea is the first and largest NFT marketplace where you have the chance to create, buy and sell NFTs
• Mintable, is also a marketplace that holds NFT arts, game items, music, and more.
• Rarible, is the marketplace for services and products which are turned into public tradable items
• SuperRare is the marketplace for selling NFTs, which represent the work of artists all over the world.

• How to invest in NFTs?

Just like crypto, you have to be careful when investing in NFTs. It advises you to always invest what you will lose when it comes to crypto, so the same goes with NFTs.

• Do your research on the NFT you are about to invest in. Every investor wants to make more, so you need to do the finding to see if the NFTs(art, music, game character, etc) have an upside value potential. We have platforms like Rarity. tools or NFTcatcher.io, which usually lists upcoming NFTs that will be released. Your research should be based on the number of NFTs to be sold, the team behind it, and whether it is an on-chain or off-chain. Note that in the case of an off-chain, an image can be lost if the server goes down since it will be using a centralized server.

• Find an Exchange to purchase crypto, in which you will buy the cryptocurrencies to gut the NFTs. So far, Ethereum stands to be the most used cryptocurrency for the purchase of NFTs. Examples of where to get crypto are Binance, coinbase, etc.

• Now we have all we need, we select the marketplace to make our purchase for NFT. I did mention several popular marketplaces above. You just need to register to any of your choices and connect your crypto wallet. The step in connecting your wallet might not be the same as each marketplace has its requirements. NFTs are either sold or auctioned for a token, so make sure to hold enough crypto to carry out your transactions including fees. You can incur fees in the cost of transferring crypto, gas fee, etc.

How to create a new NFT and is it possible to have an NFT stolen? And why use a distributed file system like IPFS in this area?

• How to create a new NFT

Owning an NFT is not difficult, as the creator can use any of the marketplaces to authenticate the uniqueness of their work. I will follow the simple steps and demonstrate how to create a new NFT. The NFTs can be for sale at a fixed rate or for auction.

I launched my marketplace OpenSea. (remember I talk about having a wallet)
Next, I click create

Click the Wallet I want to use, I will be using the metamask wallet. You can use any.

I have to agree to teams and connect my wallet, here is my dashboard.

• File requirement
• Check optional inputs
• Click create

My wallet was on the Telo network, so I'm asked to switch to the ethereum network.

done, My NFT has been created.

Now I can place it for sale by clicking the sell button.

• Is it possible to have an NFT?

Very possible, in the case where your seed phrase falls into the wrong hands. here they will have access to your wallet, and you lose any NFTs linked to that wallet. Protect your wallet first, because if someone happens to transfer your NFTs to another wallet. We all know you will not have it back because the NFTs ownership is completely changed as the verification process was legal.
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• Why use a distributed file system like IPFS in this area?

InterPlanetary File System (IPFS) is a distributed system to store and access files, data, etc, and has the full function of a centralized cloud. IPFS holds hundreds of nodes that offer storage for files and data uploaded to the network. Remember I said NFTs operate on the blockchain, so IPFS helps the user to be able to access and store their assets by identifying the file of data. IPFS helps to assign a unique identifier called hash, which is used to find the file on the network. IPFS is more reliable in this area and is a perfect replacement for centralized servers.

How are NFTs used in art, video games, and collectible card games? And how are NFTs revolutionizing property titles?

Gaming is one of the growing graphic art industries. Gamers will tell you how the graphic is becoming by the day as the industry advances. NFT is an added innovation in the gaming industry as the foundation is already available giving the graphic designers ownership of their work.

• NFT can add Value to the gaming industry. Here gamers will have full ownership of the items and characters in the game, and decide to trade, sell or hold the items. NFT, which is more secure and flexible will help protect the money earned by payers

• NFT gives players total control, which will mean players will be able to buy and sell game skits. Play will have the ability to create new skills, items, etc which can be sold to other payers. Here the player can create nations and engage in adventure to collect resources to upgrade their avatar.

• NFTs allow the player to earn from playing (play-to-earn games).

• NFTs give the player the ability to mix real and virtual worlds, as a player can hole a physical item that is represented digitally

• NFTs enhance game collectibles, giving the player ownership of their gaming history, art, music, card, etc.

• NFTs give fans the ability to earn rewards from following players

• How are NFTs revolutionizing property titles?

This is one of the powers of the NFT, especially with digital artworks and music which have a different ways of being downloaded. NFTs have revolutionized property titles by making users see ownership, authentication, and originality of their work in the digital space. That way users can hold an image of artwork but don't hold the unique token of ownership of the artwork, giving more power and ownership to the creator. As I mentioned above, NFTs offer verified and trustable authentication for any artwork sold or bought in digital space.

How are NFTs regulated? And what are the solutions to the limits of NFT development?

• How are NFTs regulated?

So far, there has been no cut line on how NFTs are regulated. So for the time, it has been categorized as a crypto asset and so will be regulated as a security token. Note that it is non-fungible, which is already a problem. This feature automatically disqualifies NFTs as crypto assets. HMRC’s Cryptoassets Manual treats NFTs depending on the particular NFT and asset it represents. Most of the means to regulate NFTs are backed by what has been done to the crypto asset. So we can not categorically set a line between how crypto assets are regulated from how NFT are regulated.

• What are the solutions to the limits of NFT development?

• Possibility to create free NFTs

• They have been an improvement in user experiences

• The unique identity to help in reinforce ownership

• The availability of more than one marketplace

• Different wallets can be connected

• Developers are beginning to perfect and have a clear documentation

• Enforcement of the crypto asset regulation on NFTs

To conclude here, NFTs are an incredible aspect of blockchain technology and a booster to the art, music, gaming, real estate, etc sectors. As the copyright fight is trying to find its foot, digital property rights are putting evening in place. NFT is the perfect tool used, powered by blockchain to give creators authenticity and ownership of their artwork. The bottom line, gaming industries are gradually moving toward decentralization. The fact that adopting NFTs, will give the player more control and also earn. Many gaming industries will want to adopt to bring more impact to online gaming.

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Cheers
Thanks for dropping by
@fombae