Non-Fungible Tokens
Over the years more and more people have been dipping their toes into the world of stocks and from there the derivative market . It is symbolic of the newer generation and their increasing sync with electronics . As they become more familiar with the digital world , so does their proficiency and in turn their ambition to tread into further , deeper waters . After much search , what emerged was the rise of NFTs or Non Fungible Tokens .
Ordinary digital cryptocurrencies share similar functions to an actual currency . While their prices fluctuate, each currency is equal to one another , i.e. , 1 Bitcoin is always equal in value to another bitcoin . They are ‘fungible’
The aforementioned NFTs are unique in the sense they are , quite unironically , unique from each other . Each and every token is different , for example , every tiger has stripes , but each tiger’s stripe differ .
Another defining factor of NFTs are that they are digital representations of the actual token . It is possible for them to exist only in the digital state . Examples of these include sales deeds to houses to even the first tweet ( from twitter ) to be posted . They are convenient for they have to be in the digital form , but the problem arises in their market stability .
These tokens are not ordinary commodities . They are akin to artists and appreciators rather than retailers and consumers . The value of a token only lies in the fact how much will a person will be willing to pay for it/ how much they perceive its price to be . Thus NFTs are a quick , very quick way to make money , for they allow people to bluff or raise the token’s value in the eyes of others . It is an auction house of sorts . And therefore it is risky . As it is a new trend , often anything can fetch a high price nowadays . But as every cycle , what comes on top must go bust , and I predict a fall in the demand of such volatile items , most probably as a new trend settles in .
To conclude NFTs are merely a step forward from cryptocurrencies , a stepping stone of sorts , and we still have to wait and see what lies ahead . Have a good week ahead !