Collectible tokens are those that have no real use value other than for everyday purposes. An example would be the recent release CryptoKitties, puppies or celebrity tokens. Even those used in different e-games are considered collectible tokens. The point is being touched on deeply at Nifty conference in Hong Kong, which is currently happening right now. Tokens of this nature are also known as non-fungible tokens, significantly differing from those released via the different ICO tokens.
What Are Blockchain Collectible Tokens?
To first distinguish the two token types, there is first fungible as mentioned before and there are non-fungible tokens. Fungible tokens are identical, meaning they have no differences between each other. Bitcoin is an ideal example of a fungible token as they are indistinguishable from one another, according to their value. All Bitcoin are the same in price with no differences from one BTC to the next.
Kitty tokens, on the other hand, are non-fungible tokens, due to the unique nature of each of them. You can’t trade one kitty across the board for another Kitty. Instead, you must exchange them for currency first. Each Kitty has its distinct characteristics and value. CryptoKitties are just one example of many non-fungible-tokens on the market, known as NFTs. By no means is Kitty Tokens the only NFT available for use.
NFTs fall into one of several different currencies. First, there are those that are assets within games – CryptoKitties are an excellent example of this – which is why they user trade them with enthusiasm. They add a new degree of desire to the game, are fun, and each has a digital personality of sorts.
What is A Non-Fungible Token NFT?
A token that represents a piece of art is a real-world NFT. The actual worth of the token is tangible through the item it represents, but from a cryptocurrency standpoint, the information on it stores directly on blockchain technology. Real assets represented by tokens can operate in this way, or several tokens can represent a single asset like a car or house. Sometimes, actual world tokens can be represented by hundreds of tokens, giving them the potential to be invested into by different investors.
Another way NFTs work is to provide representation for digital certificates. A deed to a house for example or a bond would work, as would birth certificates and driver’s license that entities verify via blockchain technology. The purpose of these is to give documents paperless representations, verifying strictly through digital means.
NFTs can’t operate through ICOs – their unique nature makes an ICO impossible – unless of course, there is an associated native token as well. Like all cryptocurrency, NFTs are still in their infancy and have a long way to go; we are seeing the beginning of the cryptocurrency industry as it is now.
What other NFTs can you think of? Leave your thoughts on the matter in the comment section below.