Tokens
A token is basically a vessel that is used to represent the value of something else. A token can be money, gift cards, vouchers...etc
Non-Fungible Tokens
For this first week we are going to talk about Non-Fungible Tokens. What exactly is a Non-Fungible token? First, fungibility means that something can be exchanged for something else that looks like it. Even clearer, imagine giving me one 1000 naira note and in return I give you back two notes of 500 naira. You will accept the money I have given you because it has exactly the same value with the one you gave me. Imagine giving me a 100 dollar note and in return I give you a 100 naira note. You would definitely not accept it because they do not have the same value and therefore cannot be exchanged for one another.
Based on the aforementioned, we can say that a Non-Fungible Token is one that is irreplaceable; only that one exists.
When we talk about Non- Fungible Tokens now we mean digital assets that are stored on a blockchain with a particular hash for transaction purposes. NFTs are mostly in the form of arts, music, pictures... etc
Art work that are used as NFTs are digital paintings or drawings created by digital artists, also songs can be made as NFTs such that anyone that buys it owns it forever. NFTs are marked in a unique way such that a particular token cannot be sold more than once. If an NFT is to be sold, the current owner is to transfer complete ownership to the buyer in form of digital keys. However an artist may decide to sell his digital art once, but that does not mean they cannot make more designs that are similar to already existing ones.
Importance of Non-Fungible Tokens
Non-Fungible tokens have revolutionized electronic transactions of the 21st century and its importance cannot be overemphasized.
Non- Fungible Tokens have helped remove power from the elite in our society by its uniqueness and simplicity in operation.
Non-Fungible Tokens have helped to increase the financial stability of people and countries in such a way that anybody can flourish in the NFT space for a very long time.
NFT on its own serves as a symbol of authority or a reward system for people who put in the work and time to create digital products.
Advantages of Non-Fungible Tokens
NFTs have proven to be very advantageous to the modern society in so many ways.
NFT helps to reduce the power and influence that governments have over their citizens to the barest minimum.
NFTs have reduced faking of art works by art thieves all around the world.
NFT makes the common person feel relatively in control because value is not given by the government, rather in is a function of the market movement and the decisions taken by the general public
Disadvantages of Non-Fungible Tokens
- Non-Fungible Tokens can be used to extort money from people unnecessarily given the fact that the prices are not regulated by the government.
- Non- Fungible Tokens can be used to launder money as prices are random and spontaneous.
- Non-Fungible Tokens can be manipulated by people who work at companies that list them on the market.
Conclusion
Non- Fungible Tokens generally have changed the way we see art, music and financial transactions. NFTs can be used as investment because the owner can decide to keep them for as long as possible, at the same time the value of the token can be either increasing or decreasing.
ASSIGNMENT
- In your own words, describe a token.
- What is fungibility?
- What is a Non-Fungible-Token?
- How will NFTs help improke the world in future?
NOTE
- Assignment should not be less than 300 words.
- Avoid plagiarism.
- use @nwabueze as one of your tags.
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