What is an NFT? | How do Non-Fungible Tokens Work?

NFTs are rapidly becoming popular in the creative and gaming worlds. They are particularly beloved by those who have entered the crypto-world and already understand the workings of cryptocurrencies like Bitcoin and Ethereum. Modern-day artists, in particular, have found a whole new audience for digital art backed by NFTs.

正如我们在我们的创造者经济的状态report, creators can use NFTs as ways to recognize achievements and otherwise highlight their relationship with their fans. They also provide a means of equity ownership for creators, with NFTs being unique digital items like collectibles, artworks, badges, and stickers. We have even discovered a surprisingly large number of NFTmarketplaces where creators can sell their NFTs。

But, like many new things in this digital age, the average person is still uncertain about NFTs, and indeed may never have heard of them at all. So, what is an NFT, and how do they work?

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什么是NFT，它们如何工作？

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What is an NFT?

NFT代表non-fungible token, a type of unique digital asset whose ownership is managed on a blockchain. Although most NFTs are inherently digital, you can use NFTs to track physical assets as well. Typical examples of NFTs include digital artworks, in-game items in videogames, unique collectibles, and even some domain names.

The essential feature of any NFT is that it is unique. Although a creator can choose to have near-multiple identical copies of an NFT, each has to be distinguishable somehow.

The original NFTs had their ownership managed on the Ethereum network (a competitor to the better-known Bitcoins.) However, there are now multiple blockchain standards that those wishing to mine (create) NFTs can use. At its heart, an NFT is just a digital representation of something unique that uses a smart contract platform to prove that it is genuine.

请注意，并非在区块链上记录的所有内容都是NFT。请记住，NF代表无牙。可替代的令牌是相同的项目，例如Bitcoinis the same as another Bitcoin. Old-style currency is also fungible – one $1 note is the same as another $1 note. Indeed $1 in the bank is the same as that $1 note.

We have had non-fungible digital assets for years. Domain names are a classic example – every domain name is different. When you buy a domain name, you have purchased the ownership of that specific URL. If you purchase an event ticket online, you are buying the right to a particular seat at a specific time. For some time, you have been able to make in-app purchases in games. For example, if you are a Fortnite player, you might have to pay to purchase a particular skin.

许多这些数字资产的问题在于它们可能很难转售。您会发现一些二级市场；例如，您也许可以在线出售活动票。但是，例如，很难找到一个市场来出售您的Fortnite皮肤。NFT的到来使建立所有权并找到一个现成的市场来出售您的数字资产变得更加容易。即使两个NFT在表面上看起来相似，其中一个NFT包含的数字信息也将与另一个NFT有所不同。

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NFT如何工作？

It is best to think of a blockchain as a special kind of database that stores data in groups (known as blocks), digitally chained together. Each block of data has a limited capacity, and when that capacity becomes full, additional data goes into another block, chained to the original. Ultimately, all the chained blocks create a long history that remains permanent. So, for example, every time an NFT sells, the new ownership details get added to a new chain in the blockchain, ensuring that the history of that NFT remains intact and ownership is secure.

NFT具有一个重要的优势：通过获得已称为财务相关的东西（例如以太坊）的支持，有一些用于发行，记录和交易的机制。它们具有与加密货币相同的优势。它们是无边界的，相对易于创建，然后转移所有权。

每个NFT令牌都有一个唯一的标识符。它们与其他令牌无法直接互换。每个人都有一个确定的所有者，可以在相关区块链市场上买卖。

创作者为NFT设定了稀缺水平。在某些情况下，creator of an NFT可以选择开采多个复制品。例如，如果您将NFT作为活动门票挖掘，则每张门票基本相同，除了座位号和活动的日期/时间。但是，对于不同类型的座位，您可以在不同级别的薄荷票。或者，您可以选择使每张机票完全不同，并且可以选择收藏家的物品。但是，每个独特的NFT都有一个唯一的标识符。

Some NFTs are even programmed to automatically pay royalties to their creator each time they sell.

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NFT标准

非功能性测试的一个优点超过其他数字资产that they follow standards. In the past, each creator of a digital asset would use their own systems, making them incompatible outside their own digital world. For instance, a game developer would set up a stand-alone in-game shop, where people could purchase avatars and other digital gaming assets but make it a closed environment. These digital assets wouldn't exist outside the game environment, and there would be no possibility of a resale market.

NFT现在有一系列的区块链，互联网和内容标准。但是，仍然有变化。例如，最常见的NFT基于以太坊区块链，其主要区块链标准为ERC-721和ERC-11155。Ethereum ERC-721标准在2017年通过Cryptokitty游戏首次流行。

ERC-1155 is a more advanced Ethereum standard that allows for the inclusion of multiple fungible and non-fungible items in the same smart contract. You store this data in a smart electronic wallet. Other Ethereum-based standards (all with unique features) include ERC-994, ERC-420, ERC-809, ERC-1201, and ERC-998.

Other smart contract platforms have also developed standards; for example, the Chinese platform Neo has NEP-10 as their equivalent to ERC-721.

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Examples of NFTs

NFTs have been increasing in popularity since 2017. CryptoKitty was the first mainstream use of NFTs. However, there were earlier experiments using Colored Coins on the Bitcoin Blockchain, Rare Pepes (tokens based on the Pepe the Frog character), and CryptoPunks (10,000 unique collectible punks.) Trading card games make a natural fit for NFTs, for example, Gods Unchained, whose cards regularly sell in secondary marketplaces.

许多NFT是收藏品，包括例如运动卡和其他稀有物。NBA TopShotcollects epic NBA moments on cards, minting them on the blockchain in limited supply. They split their cards into Common (10,000+ created), Rare (500-4,999 created), Legendary (50-499 created), and at some point in the future, Platinum Ice Ultimate (only 3 will be created) and Genesis Ultimate (only a single card).

域名已成为一种流行的NFT类型。例如，Ethereum Name Servicehas become a popular way to store all of your addresses and receive any cryptocurrency, token, or NFT. ENS is the most widely integrated blockchain naming standard. You can launch censorship-resistant decentralized websites with ENS.

You will even see NFTs in footwear.The Xis more of an artwork than something you would wear, however. The outside of the sneaker features an evolving AI painting.

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NFTs in Gaming

在游戏中有数字插件多年, but they have tended to be localized to individual development companies. However, we are now seeing an increase inNFTs in gaming。例如，Steam has aCommunity Marketwhere members can sell items to each other for Steam Wallet funds. These are in-game items for games like Counter-Strike: Global Offensive, DOTA, and Rust.

游戏中NFT的最早例子之一是Cryptokitty，它允许购买和随后的数字猫“繁殖”。这些数字猫中的每一个都不同，有些售出高达20万美元。

在黑暗的森林中，您探索不同的行星并在新世界收集文物。您还可以在战斗中赢得这些工件，并在分散的市场中进行交易。

NFTs in gaming have also allowed gamers access to themetaverse—a vast network of creator-owned spaces and virtual worlds viewed as the future of the Internet. Metaverse gaming includes tradeable and purchasable NFTs that allow gamers to earn as they play. Players of the NFT gameAxie Infinitycan develop, battle, and trade Axies like Pokémon, only with real dollars involved.

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NFTs in Art

近年来，数字艺术变得尤为受欢迎。就像物理艺术品一样，任何数字艺术品的“原始”，由NFT区块链确保，具有数字所有权和真实性。当然，您会发现任何原始艺术品的数字副本（就像您看到传统绘画的复制品一样），但只有一个数字原件。

Some of the prices that digital art has reached are staggering. A work by蜂鸣器sold for over $69 million in March 2021.

Artists have discovered that there are far more uses for digital art than just a way to verify ownership, however. They can utilize all digital capabilities to create different types of art. They can, for instance, make programmable art that changes depending on the situation. For example, the background may change color if the price goes above a particular bid.Rutger van der Tashas created art that varies depending on whether it is day or night.

Async Artis a site dedicated to programmable art. Its artists create digital paintings split into layers. Each artwork is a collection of layers and is backed by a unique token that lives on the blockchain. Layers have special parameters set by the artist and influence the overall Master image.

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NFTs as Social Tokens

You can now receive NFTs in many different ways, usually as part of a community. Quite a few of these are issued by creators to their supporters, such as for being an early purchaser of their merchandise.Social tokens allow supporters to access exclusive experiences such as meet-and-greets, early access, and exclusive memberships.一些支持者认为这些是对创作者职业的投资。每个令牌的价值随着创作者的职业发展而随着时间的流逝而增加。尽管社交令牌是可替代的，但社交NFT是独一无二的。这为有趣的维度打开了大门，例如创作者完全控制自己的个人的能力creator economy。

一些最受欢迎的社交NFT是BAYCandVeefriends。BAYC代表无聊的APE游艇俱乐部，这是一个无聊的猿人所有者的俱乐部。要进入，您必须拥有10,000个无聊的猿nft之一over $3 million! Famous and important people like Steph Curry own Bored Ape NFTs and have popped into community events, making BAYC the “place” to be seen.

Another popular social NFT is Veefriends by marketing and business guru Gary Vaynerchuk. Vaynerchuk himself hand-drawn the designs, which sold as NFTs and provided buyers access to mentoring sessions, wine tastings, fishing trips, and the annual Veecon meetup.

与所有其他NFT一样social NFTsare unique and backed经过the blockchain.

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NFTs and DeFi

NFT正在改变Defi世界。两者是互惠互利的技术，在金融行业开辟了新的可能性。Defi依靠NFT存储价值并充当不变的所有权证明的能力。

DeFi stands for decentralized finance. It is a type of financial application in cryptocurrency or blockchain. DeFi expands the use of blockchain from simple value transfer to more complex financial uses. DeFi removes the middlemen from transactions.

Most DeFi applications are built on top of Ethereum – the same cryptocurrency platform that introduced NFT standards.

Here are the applications of NFTs in DeFi。

1. Loan Collaterals

The most prominent use of NFTs in DeFi involvesusing NFTs as collateral for loans. For example, if you bought a rare NFT item in the past, you could use it for a cryptocurrency loan today。This has resulted in NFT lending fueling the growth of DeFi by as much as$49 billion在2021年。平台188滚球地址接受NFT作为抵押品，是Trustnft，Pawnfi，NFTFI，Genesis和Arcade。

2. Fractional Ownership

You can also buy shares in some NFTs, rather than buying them outright. This means you can be a part-owner of an expensive NFT, for example, a one-off piece of digital art. You can even trade some of these shares.Fractional.art允许用户分割NFT并生成符合ERC20的股票。这有助于昂贵的NFT变得更加液体，减少入学费并实现更多访问权限。

3. Insurance Management

DeFi and NFT are also expected to switch things up in the world of insurance management. Insurance policies for both crypto assets and traditional insurance plans can be converted to NFTs that don’t have expiry dates. This means insurance products can be purchased, put up for sale, or transferred without you having to go through the taxing renewal process every single time.CoverComparedcombines DeFi and NFTs to reduce insurance policy prices and offer premium-quality insurance products. It aims to work with various multinational insurance providers to expand its offers.

4. Debt Management

NFT and DeFi can help reduce human errors and redundant processes associated with managing and tracking the finances of large groups of people. When approvals and various other processes are automated using smart contracts, things run smoothly and result in better transparency. If a borrower uses an NFT as collateral and can’t repay the loan, the NFT is automatically transferred without the need for any legal action.

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Final Thoughts

NFTs are speculative digital assets that have captured the interest of crypto enthusiasts and collectors alike. It has demonstrated its various uses and possibilities even as some people remain skeptical of its value. While some critics argue that NFTs are a fad, it’s evident that many don’t agree.DappRadarhas seen NFT sales rise from around $100 million in 2020 to$25 billionin 2021.

With NFTs like theGucci Ghost平均售价为2,178美元，蜂鸣器videoselling for $6 million, NFTs seem like they’re here to stay. NFTs are as volatile as cryptocurrencies, but for those who play it right, the opportunities are endless. Creators can mint NFTs and sell them to avid fans and earn royalties for each purchase. Audiences can support their favorite creators by购买NFTeither to trade later or to keep as a souvenir.

Whatever your beliefs about NFTs are, only time will tell how this trend will pan out. For now, it’s an emerging technology that’s exciting, lucrative, and financially promising.