If you have been paying any attention to anything relating to blockchain technology over the past eighteen months or so, you have likely come across non-fungible tokens, also known as NFTs. In fact, chances are that if you are reading this piece, you probably already know a bit about them. You may not be an expert on them, but you have at least heard the term.
However, many amongst us still have no idea what these bits of code are, much less why they have the potential to be so powerful. For those of you who have not yet been exposed to the concept or realities of NFTs, never fear. This brief primer will help get you up to speed. As an aside, this discussion does assume a certain very basic level of understanding of blockchain technology.
What Are NFTs? – A Primer
The obvious first question to answer is also the most difficult. For many, NFTs represent nothing more than the digital equivalent to tulip bulbs. And in all honesty, that criticism does reflect a certain truth, particularly considering how rampant the retail speculation over the past year or so. Still, that does not actually address what NFTs are, and represents only one of the admittedly lesser use cases of the technology. So perhaps it is better to explain what NFTs allow us to do.
Essentially, NFTs provide us the capability to tokenize all manner of objects, both real and ephemeral. As we have seen with the recent NFT craze, art and collectibles have proven to match well with this application.
We must remember that the fundamental use case of blockchain technology is to create an immutable digital footprint through a digital ledger system. To put it in the most basic of terms, NFTs are unique digital tokens that people use to represent the ownership of unique items. Those unique items can run the gamut from JPEGs – think Bored Ape Yacht Club and the like – to real estate. In fact, the entire story of NFTs began in the middle of the last decade, when digital artists Kevin McCoy and Anil Dash minted the very first NFT back in 2014. As an aside, minting is the term for creating a new NFT using blockchain cryptography.
Despite the fact that NFTs have technically been around for over eight years at this point, the broader market took a while to catch on. With the launch of the online game, CryptoKitties, back in 2017, the market took greater notice. That project proved to the world – and more importantly, indicated to potential investors – that NFTs would be a viable, and potentially profitable, addition to video games.
Ownership of an NFT represents ownership of an asset that is secured by one of the major layer-1 blockchains, like Solana, Ethereum, Polygon, etc. Since one can theoretically neither modify the record of ownership, nor duplicate an NFT into existence, NFTs provide us with a technologically robust means of tracking unique items. Indeed, it is the immutability of the blockchain itself that enables NFTs to do this.
To Be, or Not To Be – Fungible, That Is
Fungibility refers to the degree to which one item can be repurposed for some other end. For tokens like BTC, ETH, or SOL, those tokens have a high degree of fungibility. Each token is, for all intents and purposes, indistinguishable from any other.
Non-fungible tokens represent the extreme opposite of the spectrum. Something non-fungible cannot easily be interchanged with another due to the inherent uniqueness of the token itself. It is the uniqueness itself that gives a particular item value. Therefore, being able to track that uniqueness gives us the ability to confirm provenance and, ultimately, ownership.
As everything becomes more digital, the need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership becomes an absolute necessity. NFTs provide a perfect solution for this sort of application, precisely because of their inherent coded uniqueness and immutability.
The topic of NFTs spans a much greater amount of knowledge and information than could be covered entirely within the confines of this article, but we hope this provides the basic building blocks through which to inform people in the space and, more importantly, newcomers who have just begun to dip their proverbial toes into the pool. Hopefully this has provided a good jumping-off point for the future.
For Further Reading
In the coming articles, we will begin to delve into more complex explanations of the fundamental knowledge necessary to navigate the digital asset space. The Serenity Shield team will continue to expand our educational offerings for the benefit of the space. However, if you need to start from the absolute beginning, you can find an extremely well-compiled glossary of terms here, published by Kairon Labs. For a slightly more academic perspective, take a look at University of Pennsylvania’s beginner’s guide.
Serenity Shield News, Shortly
Now that our decentralized application (DApp) has been live for a few weeks and we have numerous beta testers helping us improve our reliability and robustness, we have already turned our attention toward remedying wallet security, for all applications. Our StrongBox solution has already been proven to work as designed.
As we more fully develop our solution, the team will add a whole bevy of more specific use cases. One of these use cases will be our very own Serenity Wallet. Just like our StrongBox, our wallet will incorporate privacy and security by design, not as an afterthought. Only then can we all enjoy the serenity of being in the best hands possible – our own.
Serenity Shield proudly announces the end of our first private cycle of beta testing. We would like to thank our community of contributors and supporters for their patience and support so far. The team will now expand our private MVP DApp test further. Following on the heels of our successful preliminary round, the team will open the opportunity for broader beta testing of our solution to any pre-sale holders of Serenity Shield’s native token, SERSH.
We are excited to open this opportunity to a broader audience, and in anticipation for a full public rollout in the near future. Please stay tuned for details on that stage, if you have not yet gotten involved.
Please join us on our Telegram channel. There, you will be the first to know about official project announcements and developments. Additionally, you can also find us on Twitter, Discord, and our website. Please visit our whitepaper and previous articles here for a more in-depth discussion of our project. We are always available on all of our platforms to assist with your questions.