Crypto Academy Week 10 - Homework Post for @levycore | Non-Fungible Tokens (NFTs)

Hello steem community, this is my task submission to @levycore’s class on NFTs. In today’s discussion, we will also be talking about a popular project that uses NFTs.

^{Photo by Thuy Dung on Cryptonomist}

Non-fungible Token, NFT

The term NFT stands for non-fungible tokens, but before we fully grasp the concepts we have to understand what differentiates a non-fungible token from a fungible token.

A fungible token is one that can be easily exchanged for another token of the same type. Hence, you can say that both tokens are indistinguishable. Also, it can be divided into smaller units or fractions. A good example would be exchanging a $100 note with 10 different $10 notes.

On the other hand, a Non-fungible token, NFT, is a digital asset that has its unique qualities and is not interchangeable. Examples of NFTs are photos, audios, videos and other file formats.

The broad name NFT can be used to represent real estate, collectibles and artworks, like the original Mona Lisa artwork. There are several interesting application of NFT in our world today. Hence, the current hype in the cryptosphere is not simply exaggerated.

^{Photo by Decentraland on Medium}

Virtual Real Estate NFT

In today’s task, we’ll be looking at the virtual real estate and see some interesting projects that are based on this sort of NFT. It is not surprising that these NFT projects are collaborating with the video game industry to bring out the very best products.

While combining blockchain technology with gaming is no easy task, NFT projects develop virtual metaverse that provides value for the end user. The top three projects that utilise blockchain technology in the virtual real estate gaming sector by means of NFT are Decentraland, The Sandbox and Enjin.

	Decentraland	The Sandbox	Enjin
Token type	ERC-721	ERC-721 & ERC-1155	ERC-1155
NFT Marketplace volume	> $400k	> $100k	—

^{*Market volume data from dAppRadar.}

^{Photo of Decentraland Game by Miles Anthony on Medium}

Decentraland

Decentraland is the first metaverse on the ethereum blockchain that allows users to create their own contents and apps. This virtual reality (VR) platform enables users to get used to the platform, while also monetising their efforts. As a decentralised project, there are no central oligarchs.

Developers can use advanced SDKs to create content in this virtual reality game. Whereas, users with not so much experience can use the simple Builder tool that is available in Decentraland.

As one of the most popular metaverse in the crypto society, it has hosted games with popular brands, like Decentraland Games and Matic. The reports from the virtual events are always available on big crypto magazines.

Tokens

In this real estate metaverse, there are three tokens used:

MANA: money
LAND: an accessory that contains all the layers
WEAR: articles and wearables

MANA is the money that is used in Decentraland. It is also the currency that lead me to the project. While doing fundamental analysis on the token, I got to know about the project itself many months back.

MANA is used to rent or buy LAND. Decentraland’s smart contract is based on the ERC-721 type, unlike that of The Sandbox that supports ERC-721 and ERC-1155. Hopefully, in the nearest future the project would support other smart contracts.

^{Photo by cryptopedia on Gemini}

Use Cases

The project has won the hearts of many and even attracted some to the crypto community. The life conferences where Decentraland has been used have shown the real-life application of blockchain technology with by means of NFT.

If you are familiar to a game like Unity, then Decentraland will be no stranger to you. The game is like living in a virtual place away from reality. During the lockdown last year, it garnered lots of interests.

Content creators can create digital assets and share with others that are on the platform. Also, users with shared interests can come together to build projects based on their ideas. When it comes to virtual tourism and 3D design, the project does so well.

Let’s now see some differences between NFT like Decentraland and other cryptocurrencies.

	NFT	Cryptocurrency
Fungibility	non-fungible	fungible
Quality	Unique	Not unique
Amount	Rare	Abundant
Inflation	No inflation	inflation
Divisibility	Indivisible	Divisible
Example	Decentraland, The Sandbox and Enjin	Bitcoin, Tron, STEEM
How token value is determined	Dependent on asset value	Dependent on market fluctuations

Conclusion

If you’ve been following up the news lately, then you’re likely to have heard about NFTs. There have been lots of social media posts on what users would love to sell as NFTs. To simply grasp the concept, NFT is just a unique digital asset. The asset is linked to a smart contract, tied to a blockchain, usually the ethereum blockchain. Hence, it’s not possible to duplicate an NFT.

Nonetheless, I want to thank @levycore for his lecture this week. It has given me the opportunity to contribute to the growing NFT community.