Ethereum-based art collectors are an emerging class of cryptocurrency investors. Digital collectibles are becoming very common. The world of digital collectibles is an exciting world and it can get to feel like someone has ventured into a rabbit hole when trying to venture in to it.
To understand digital collectibles one should recollect the term NFT – Non-Fungible tokens. The world of digital technologies opens up a new realm of opportunities. The digital collectibles are represented by Non-Fungible Tokens (NFTs) which are unique digital items. The ownership of these digital items and transfer of ownership is recorded and managed publically on the blockchain.
It is important to differentiate between “collectibles and non-collectibles” in terms of “fungibles and non-fungibles.”
Fungible, for clarity, refers to things that can be easily replaced by another thing of equal value. For instances, when anyone is withdrawing cash out of the ATM, they believe that the case is good as cash for everyone else and one does not go to the extent of verifying the serial number.
The technical terms ERC-721 and ERC-1155 refers to non-fungible tokens and is applicable for collectibles. Collectibles are unique and special and it cannot be easily replaced. Non-fungible tokens are not exchangeable everywhere. They have value only in particular ecosystems. For, instance some gaming tokens are accepted only in the gaming ecosystem and it cannot be sold outside to others, but it has some value in a particular ecosystem.
Blockchain technology makes it possible for developers to bring in an extra layer by virtue of which it will be possible for end users to manage the ownership and management permission by the process of tokenization. The non-fungible nature is tokenized. In the Ethereum Ecosystem, they make use of the ERC-721 standard.
By ERC-721, NFTs become rare and desirable. Gaming environments are where NFTs gives players with real ownership over their items, this permitting them to monetize their rare assets. They will be able to buy these NFTs in gaming environments or in other exchanges as available.
NFTs are also getting used in a non-game environment like in digital NBA and NFL trading cards to be used in real-world property or in works of art.
For clarity, The ERC-721 introduces a standard for NFT, in other words, this type of Token is unique and can have different value than another Token from the same Smart Contract, maybe due to its age, rarity or even something else like its visual.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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