Crypto is still new. And crypto news is even newer. So, it’s not surprising that, with the exception of a few thoughtful pieces on specific tokens like Bitcoin, Ethereum, XRP and EOS, most crypto “news” simply regurgitates material from press releases (a.k.a., marketing).- Non-Fungible Tokens
It’s the same no matter what industry you’re talking about — after all, marketing has been around since the beginning of time — but it appears to be especially rife in crypto.
Which is why I was pleasantly surprised after having a conversation with Brad Yasar, founder of VC firm M Ventures (formerly Blockchain Ventures), who explained to me how he believes the market is valuing fungible tokens differently from non-fungible tokens (NFTs).
As background, fungible tokens are designed to be used as a currency (e.g., Bitcoin) or utility token (all others); they are identical to one another and are interchangeable. Non-fungible tokens are like collectibles and can have many different uses; they represent assets that aren’t interchangeable.
Will there be more and more businesses minting NFT’s? Yes, you can mint as many NFTs as you want on Rarible. Go to your profile page and then click “Issue a new NFT” button. Here is a step-by-step guide on how to mint an NFT:
Make sure you have enough RARI on your account balance. You need 0.2 RARI for every 10 NFTs you mint. For instance, if you want to create 100 tokens, you’ll need 2 RARI on your balance, and if you want to mint 1000 tokens, you’ll need 20 RARI on your balance.
This way we ensure that people won’t be able to flood the marketplace with worthless tokens.
Select assets that you would like to issue as NFTs (you can upload 1 image or GIF at a time).
Give your collection a name and write a short description of the collection (optional).
Click “Issue this collection.”
You will be redirected to the Ethereum blockchain where you will be asked to confirm the token creation transaction by paying for it in ETH or any other ERC20-compatible cryptocurrency using Metamask or Wallet Connect.
The Battle Lines Are Drawn
The battle lines are being drawn between fungible tokens and non-fungible tokens. Today, blockchain projects that prioritize non-fungibility include Ethereum, EOS and TRON, while the majority of blockchains built on the UTXO model like Bitcoin and Litecoin support fungibility.
Fungible tokens are crypto assets that are interchangeable. 1 bitcoin is always the same as another bitcoin and all ethereum is worth the same amount. This means fungible tokens can be traded in fractions and are easily divisible. Fungible tokens are very popular today and have played a major role in the development of cryptocurrency over the last several years.
Non-fungible tokens, on the other hand, represent a blockchain based asset that cannot be subdivided or exchanged for an identical item. NFTs are one of a kind and provide evidence of ownership for a digital asset, much like a deed to your house does for physical property. In some cases, these digital assets can be sold for millions of dollars, such as when Jack Dorsey sold his first tweet in an auction for $2.9M USD.
The main difference between NFTs and fungible tokens is that NFTs provide proof of ownership to a digital asset while fungible tokens do not. This makes NFTs extremely valuable because they can be used to represent any type of digital value, from art and collectibles, to real estate, to virtual land and characters in games!
One token’s fungibility doesn’t always equal another’s
The most common example of a fungible asset would be money — if you have a $20 bill in your possession, it’s worth precisely the same as any other $20 bill. Because all money has equal value, each monetary unit is completely fungible with any other. For instance, if a merchant gives you change for a $20 bill, they wouldn’t care whether or not you gave them a new or old bill. They will gladly trade it for something else of equal value — say, two $10 bills.
Fungibility isn’t just about currency: It also applies to natural resources like gold and diamonds because each unit is interchangeable with another of the same size and quality.