Hi, there 👋.
We hope every one of you is having a great time. In this article, we are going to discuss a very important topic which many of us may not be familiar yet but has gained a bit of attention recently with the launch of a game called Crypto Kitties
. This game went viral after it was launched and with it the idea of non-fungible tokens
began to hover among the crypto community. Now you may think what was special about this game ?
Well long story short, this game was the first implementation of non-fungible tokens
on the blockchain or more specifically on the Ethereum Blockchain
where users can collect and breed digital cats 🐱 that lives on the blockchain. Each of the kitties are one-of-a-kind that means it cannot be replicated
, taken away
or destroyed
and that's the overall beauty of the concept, the concept of digital scarcity or rareness
on the blockchain and was not like anything people have seen before this. To understand the implications these could have on our society let start off with the defination of non-fungible tokens. As per wikipedia, the defination goes something like this -
A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not interchangeable.
source
This is in complete contrast with cryptocurrency or tokens most people are familiar with. To understand this a bit better let's consider us Flamingirl and Pankaj
.
Situation is as below:
👉 Flamingirl
owns 1
Eth and a crypto kitty
named A
.
👉 Pankaj
owns 1
Eth and a crypto kitty
named B
Now say, if Flamingirl and Pankaj wants to interchange their 1 Eth, they can do so as both Flamingirl's and Pankaj's 1 Eth are indistinguishable
with no uniqueness between the her 1 Eth
and his 1 Eth
and both the Eth have the same value as for ETH being a fungible token
it doesn't matter which particular ETH they hold. This is not only the case for ETH but is valid for every ERC20 token out there. In fact Bitcoin, Litecoin and all similar cryptocurrencies out there are all fungible tokens and interchangeable with one another within their blockchain. But this is not the case for the Crypokitties. Both Flamingirl's and Pankaj's crypto kitties A an B
despite being on the same Ethereum blockchain are unique on their own
and are not directly interchangeable
one for the other as both the kitties
have different genes
, traits
and value
.
So it may so happen that Flamingirl's crypto kitty A may worth say 0.9 ETH
while Pankaj's crypto kitty B may worth say 0.6 ETH
depending on the features / traits in demand. That is to say both the crypto kitties or non-fungible tokens A and B may have different value.
If you think in a technical way each crypto kitty is a token based of some unique information and thus Flamingirl's cat is completely different from Pankaj's and so cannot be interchanged. You can think of it like both Flamingirl and Pankaj have their own graduation certificates as non-fungible token. Although their individual certificates are valuable to them but being completely unique they cannot be interchanged one for the other
.
Cryptocurrency(Fungible token
) is the first demonstrated use case of Blockchain and by virtue of its functionality, do require to be interchangeable but with the blockchain technology progressing with time people began to realize that cryptocurrency was just a scratch on the surface
and Blockchain has far more usage potential. Due to its inherent properties like immutability
and security
, Blockchain started to be seemed as the best for storing information and digital proof of ownerships of all kind. But all this wasn't easy as current fungible tokens were good at storing value but not capable of storing unique information into the tokens
, which is required if we want to store information like proof of identity, proof of ownership etc.
This is where Non-Fungible token plays a key role enabling users to store unique information in the form of tokens
on the blockchain while making it impossible for anyone to steal your ownership or identity. Regarding this, we would also like to point out the fact that just as fungible tokens on Ethereum are based on ERC20 protocol, for non-fungible tokens are based of the ERC721 protocol
, which was introduced with cryptokitties and has gained a bit of popularity since.
👉 Unique and Not Interchangeable
- As we have discussed in the example above since Non-Fungible token are based on some unique information, therefore, one Non-fungible token cannot be interchanged for another non-fungible token even of the same type
.
👉 Not divisible
- If we consider Bitcoin
, we all know that it is a fungible token and can be divided into smaller parts known as Satoshi
and similar is the case of all other fungible tokens. But talk about any Non-fungible token
eg. Cryptokitties,
they cannot be divided into smaller part and either we own a full cat or we own nothing
. This is same as the fact that if we convert out ID card into a non-fungible token then trying to divide the token would be like trying to divide our ID card
into parts which seem meaningless even to think about such a scenario hahaha..
👉 Based on ERC721 protocol
- All non-fungible tokens as of now are issued on Ethereum Blockchain and the Protocol followed id ERC721.
If we speak of applications of non-fungible tokens then we are only are limited by our imagination
and nevertheless below is a list of few applications of Non-fungible token.
👉 Digital collectables
- Non-fungible tokens has brought in the idea of digital scarcity
, which is a great thing by itself and has lead to the trend of owning digital collectable just like real-world collectables. Eg of a collectable based on the Non-fungible token as discussed above is crypto kitties, where users can collect, trade and even breed their digital cats to produce a completely different and unique digital cat.
👉 Digital Identity
- These tokens can also be used to represents a user birth certificate, his graduation degree, national Id etc. which are easily verifiable anywhere, without compromising the user's security and privacy.
👉 Digital proof of ownership
- Non-fungible can be used as a proof of ownership of real world property, artworks or even intellectual property.
👉 In game assets
- Non-fungible tokens can also represent in-game assets
which are in complete control of the user who own those assets.
Current problems with Non-fungible Tokens
Non-fungible tokens on blockchain is a new idea and also the protocol(ERC721) on which these tokens are issued. We are still in very early stage of Non-fungible tokens and as more developers become familiar with these tokens and the protocol the more these token become mainstream.
This article was written by @pankajborah and @flamingirl.
If you liked reading this article, feel free to FOLLOW US, UPVOTE and RESTEEM! It's always appreciated =D. Thank you all for your support and see you soon for a new flamingirl's adventures!
Hey @pankajborah Sir i want to ask a question that if we can if we want to own a Cryptokitties Than what we have to take care of.
One more thing if we hold Cryptokitties is there any chance that it's price will increase and if it increase that what are the criterias for it.?
And Its really appreciateable post you made.
@flemingirl and @pankajborah both of you are having a great knowledge of cryptos..
Keep working....!!!
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Hi pradeepkr34, sorry for the late reply, actually I was away from my laptop. Back to your question, the price of a crypto kitty is based on the attribute(
cattributes
)and thecombination of traits of the digital cat
. And also if you ask about the possibility of a price increase, it depends on a lot of factors like the generation no. the cat belongs to and here too, the rule of demand and supply apply. Let me give you an analogy, say you own a pokemon card, and if people find the pokemon card you have is very rare then they might pay you a good sum for that card. Likewise, If people feel that cattributes/traits of your digital cat are very rare then your digital cat will have a higher value. While most of the code of crypto kitties is open source, but the code that creates the DNA or you can say the quality and traits of the cat is closed source.Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
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It is so hard to predict the exact fashion of the crypto market due to its being so unstable. in only some pump or sell off, the market actions significantly and this makes crypto an interesting asset to make investments and exchange. if you recognize how the marketplace behaves and know how to play this game then you may earn massive due to its volatility. Steem alternatively become so promising and I am so excited what steem will bring us inside the future:
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Yes Steem is very promising, just look at the website https://blocktivity.info/ to realize it.
And Bitshares too ...
Thank you for stopping on this post and commenting =D
Have a nice day!
Steem on!
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I've always wondered what cryptokitties were and how they work. But your post has made me to understand it more. Thank you
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You're welcome my friend! =D
Have a nice day!
Steem on =D
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can I ask a question ?
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Of course!
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I am not as successful as you in the SteMit platform. I am a cripple and I can not actively work. I give my subsistence from the internet because I can not walk. I can not win and nobody helps. Will you help me?
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Interesting reading and great explanation! Hadn't heard of these tokens before, I can imagine all the applications... pretty cool!
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Nice to read that =D Have a nice day!
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NFTs are very interesting development, but I think it will be a while before one reaches the popularity of Cryptokitties. Gods Unchained looks fun tho!
As you seem interested in Ethereum projects, maybe you consider becoming a Trivial token analyst?
Basically, I want to create some up-to-date reviews of the more popular tokens, focusing on fundamentals and usage.
To build it out, I am crowdsourcing the initial content, and getting in touch with a few bloggers from Steemit who analyse crypto. I'd be delighted if you considered writing about a token that interests you?
More details here: https://steemit.com/cryptocurrency/@sroka87/become-a-token-analyst-on-trivial-co-earn-steem-eth
Keep up the good work!
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You have recieved a free upvote from minnowpond, Send 0.1 -> 10 SBD with your post url as the memo to recieve an upvote from up to 100 accounts!
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