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What can you do with non-fungible tokens (NFTs) today?



SUMMARY


Non-fungible tokens (NFTs) are unique, indivisible and demonstrably scarce digital assets useful for gaming, art and securing the provenance of luxury goods. Since the success of CryptoKitties in late 2017, the use of NFTs has grown rapidly, proving the functionality of blockchain in areas far beyond finance and cryptocurrency.



CONTENT


  • Overview

  • The CryptoKitties universe

  • Games

  • Digital art

  • Other applications



OVERVIEW


Non-fungible tokens (NFTs) are unique, indivisible digital assets created on blockchains. The uniqueness of each NFT can be proven by its unique identifier, which is created using a special cryptographic code. This is how NFTs differ from fungible assets like Bitcoin or fiat currencies like the US dollar. A Bitcoin is always the same as any other Bitcoin in circulation, and as such Bitcoin units can be exchanged.


Most NFTs are based on the ERC-721 token standard, an Ethereum-compatible identifier developed by the developers of CryptoKitties. Since CryptoKitties became known for its non-fungible token technology in 2017, the industry for NFTs has grown rapidly. Today, NFTs can be found in games, collectibles and art. NFTs are even used to secure the provenance of luxury goods (historical proof of ownership). Non-fungible tokens can also be bought, sold and traded on digital marketplaces like OpenSea and Nifty Gateway.


Here's an overview of where you can use NFTs today and what you can do with them:



The CryptoKitties universe


After the success of CryptoKitties, there were a number of imitators. Today there are puppies, monsters and even crypto-celebrity NFTs that you can collect.


CryptoKitties has evolved into more than just a platform for digital collectibles. CryptoKitties users can interact with third-party apps to customise and play with their digital cats.


KittyHats - A service that offers outfits and other accessories to personalise your CryptoKitties.


KotoWars - A fighting game, where CryptoKitties are given a specific attack and defence value and can fight against other players.


Kittyhelper.co - This platform helps CryptoKitties owners understand how genetics, statistics, pricing and other game mechanics interact. Certain parameters indicate a higher chance of sharing rare CryptoKitties, which is a way to earn extra money by renting them out to other users.


NBA Top Shot - CryptoKitties has collaborated with the National Basketball Association (NBA) to create a collection of NFTs featuring animated highlights from basketball history, such as buzzer-beating three-pointers and gravity-defying dunks.



GAMES


One of the most important use cases for NFTs today is games. After the first game developers to come to market with blockchain, established game developers such as Ubisoft are now experimenting with the technology.


In December 2020, the top NFT-based games include:


Sorare

With 100 officially licensed football clubs, Sorare lets you buy NFTs representing professional football players to play fantasy games against other collectors.


Decentraland

Decentraland is a virtual reality universe similar to The Sims or Second Life. Decentraland residents buy, sell and exchange ERC-721 tokens called LAND and use an ERC-20 token called MANA to buy other items in the universe. Decentraland has art exhibitions, games and special events that users can participate in.


Gods Unchained

Gods Unchained is a turn-based collectible card game. The NFT cards feature various characters, creatures, events and powers that you can use against an opponent.


My Crypto Heroes

My Crypto Heroes is a multiplayer role-playing game that issues NFTs of characters and other items in the game. Players level up their characters through battles and quests.



DIGITAL ART


NFTs offer several advantages for digital artists and collectors. Before NFTs, the authenticity of digital art could not be verified, making it difficult to monetise the industry. Now, blockchain technology can track unique digital art in the form of NFTs and also verify their provenance, authenticity and rarity.


Some of the most popular NFT art marketplaces are SuperRare, Nifty Gateway, Know Origin and MakersPlace. The mainstream art world has also taken notice. Renowned art auction house Christie's New York recently sold its first NFT artwork - a circular panel inscribed with 300,000 Bitcoin digits that responds to its geographical location and the time of day - for $131,250.



OTHER APPLICATIONS


Owning the perfect domain name can lead to more visitors to your website and therefore higher profits. Domains are in short supply, and buying the right one is often costly and time-consuming. If you link a domain to an NFT, you can track the domain's path without losing it. This also makes it easier to buy, sell and trade a domain - without middlemen. In addition, NFT domains can easily be linked to other NFT systems. Ethereum Name Service (ENS) and Unstoppable Domains, for example, are two domain providers that are linked to NFTs.


Counterfeiting is a problem often faced by consumer product manufacturers. Global damage from counterfeit goods is expected to reach $4.2 trillion by 2022. Customers want to know that the exclusive hoodie, handbag or rare diamond they bought is real. Real items linked to NFTs provide a way to track the lifecycle and journey of the item and verify its authenticity. Louis Vuitton is experimenting with NFTs to solve this problem, as are other brands in the LVMH conglomerate and diamond specialist De Beers.


As the NFT industry grows, developers are trying to improve the ERC-721 token standard and offer entrepreneurs more flexibility. ERC-1155, for example, is a standard that allows a single smart contract to manage multiple token types - including fungible tokens, non-fungible tokens and tokens that fall between the two classifications.


NFTs have expanded the applications of blockchain far beyond the financial sector, appealing to a wide audience of gamers, artists, luxury consumers and digital cat enthusiasts alike. Non-fungible tokens have the potential to fundamentally change our relationship with the digital world by introducing object-based, verifiable digital scarcity.

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