Non-exchangeable digital currencies, or NFTs, which are abbreviated as " n on- f ungible t okens".

The non-fungible cryptocurrency NFT is one of the present digital currencies that has its place in the cryptocurrency market and represents another angle and capacity of the various blockchain capabilities.

Below we will go into some detail about non-exchangeable digital currencies, how they work, and their importance.

 What are non-exchangeable digital currencies?

A simple definition of non-exchangeable digital currencies can be presented and deduced from its name that suggests that these currencies are not exchangeable by virtue of that each currency is different from the other, and that each currency is registered in the smart contract, and therefore cannot be directly exchanged for another digital currency, nor can it be traded either. , As no two are alike from the same coin.

Whereas, in contrast, one bank note can simply be exchanged for another, if it is of the same value, then there is no difference to the bearer.

Even cryptocurrencies such as Bitcoin are considered a fungible currency, as some bitcoin can be sent to someone and keep some of them in the wallet with no difference in the currencies, whether sent or remaining.

Bitcoin will remain the same, the value may change depending on time, but it is basically the same.

Bitcoin is also divisible, as a small amount of bitcoin (satoshi) can be sent while non-exchangeable coins are not divisible.

The non-refundable currency can be likened to the attendance ticket for a specific event on which the name of the person is registered, so this ticket cannot be divided.

Perhaps what contributed to the popularity of non-exchangeable digital currencies is the cute game "CryptoKitties", where each cat represents a non-exchangeable digital currency.

The unique information of the non-exchangeable currency, such as “CryptoKitty” is stored in a smart contract and the information is statically recorded on the currency's blockchain.

“CryptoKitties” are Ethereum coins built to the “ERC-721” standard that use protocols based on the Ethereum blockchain.

What makes NFT coins so special?

Non-exchangeable coins have unique features and are usually associated with a specific asset.

Can be used to prove ownership of digital items within games or ownership of real physical assets.

In addition to the possibility of using non-exchangeable currencies in the field of games, they can also be used in many other areas, including distinguishing between them to prove their value or scarcity.

These coins can represent everything from virtual plots of artwork to property licenses.

Non-exchangeable currencies are not traded on cryptocurrency exchange platforms, instead they are bought or sold in digital stores such as “Openbazaar” or the “LAND” store based on “Decentraland”.

How do non-exchangeable digital currencies work?

Digital currencies such as Bitcoin and Ethereum are fungible.

Whereas the 721 ERC-based coins are not exchangeable.

For your information, these non-exchangeable digital currencies are not limited to Ethereum, but can be created on the Neo, Tron, EOS blockchain, as these networks support the work of non-exchangeable currencies.

Non-exchangeable currencies and their smart contracts allow the addition of detailed attributes, such as owner ID, rich metadata or secure file links.

The strength of non-exchangeable currencies is steadfast digital proof of ownership.

These non-exchangeable digital currencies are still under development, just as the blockchain based on it is.

The most prominent examples and projects of non-exchangeable digital currencies:

The Terra Virtua project:

As he told us, non-exchangeable digital currencies derive their value from their scarcity, which is why many brands start licensing their content for use in digital collections, and from the prominent companies at the forefront of providing the digital collectibles market we find “Terra Virtua”.

The "Terra Virtua" project describes itself as "the digital home", allowing fans to create a digital "fancave" where they can view their NFTs.

In September of this year, the company released a series of licensed NFTs based on the "Godfather" movie trilogy.

Said Mr. "Gary Bracey" CEO "Terra Virtua":

The primary mission of Terra Virtua is to bring NFT back into mainstream.

The use of NFT is inspired by the idea of ​​bridging the digital world with the real world.

We are starting to think a lot about creating something more dynamic, by providing something in the digital world that was not practical in the real world.

Project “SuperRare”:

While the “Terra Virtua” project creates NFT drawing inspiration from major brands and Hollywood movies, NFT markets specifically deal in art and artboards, which is another major industry for NFT.

Project “SuperRare” is one of the leading players in the emerging field of NFT-powered digital art.

As its name suggests, “SuperRare” is all about providing a market for rare and valuable digital art pieces.

At SuperRare, the artists' works are validated on the Ethereum blockchain, which guarantees value.

To date, more than 10,000 pieces of art have been collected by users, according to the "SuperRare" website.

In October 2020, “SuperRare” announced sales of $ 4 million on its platform, with artists making $ 3 million after selling more than 10,000 works of art.

Decentraland Project:

As we told us at the start of the article, the gaming industry is a fertile field for non-exchangeable digital currencies, as NFT is increasingly making its presence felt in the gaming space.

Decentraland is the world's first fully decentralized gaming world, built on the MANA digital currency built to the ERC-20 standard.

Users can spend MANA to buy goods and services and 10 x 10m pieces of virtual land, the project also supports non-exchangeable LAND digital currency.

Decentraland initially offered an initial public offering of MANA coin, it took $ 20.7 million and sold out within five minutes.

Decentraland's game world is similar to Minecraft.

Simple blocky graphics and user-generated creations, which include everything from art galleries (where NFTs can be viewed) to simple in-game built games.

In addition to LAND, Decentraland supports a number of different NFTs, such as Axie Infinity and CryptoKitties.

Non-exchangeable digital currencies and decentralized financing DeFi:

Non-exchangeable digital currencies are also making an impact in one of the cryptocurrency's most interesting and innovative spaces, the decentralized finance (DeFi) space.

One example of how NFT is being used in decentralized finance is “Aavegotchi”, a startup funded by the crypto NFT acquisitions used in the game world.

The Aavegotchi platform also contains previously Aave coins “LEND” installed within it as collateral, which means that a return can be generated on LEND.

If the owner liquidates his stake, “Aavegotchi” disappears.

Another service that aims to connect the DeFi and NFT communities is "Rarible", a decentralized application that enables users to sell digital artwork in the "Rarible" marketplace.

In July 2020, “Rarible” launched the “RARI” coin, a governance currency used to reward creators and collectors, and that can only be earned through active participation on the platform.

The market for "Rarible" in relation to other markets is outperforming them all, according to data published by "Dune Analytics" "Rarible" has dominated NFT sales since September.

If "Rarible" continues to dominate the industry, DeFi is on its way to becoming synonymous with non-exchangeable currencies.

The NFT industry may be young, but for some it is full of potential.

The future of NFT digital currencies:

Mostly, non-exchangeable currency innovations are implemented in the gaming and crypto field.

Increasingly, well-known brands are licensing their content to NFT, with the fantasy soccer game Sorare registering 100 soccer clubs on its platform, while games like “Smurfs”, “Minecraft” and “Doctor Who” have been switched from the BBC to NFT Coins.

For games, non-exchangeable digital currencies can be used to represent in-game items, which may allow them to be transferred to new games or traded with other players.

However, the potential and technology of non-fungible cryptocurrencies is much broader with the potential to apply to copyright and intellectual property rights, ticketing, and the sale and circulation of video games.

Non-exchangeable currencies add the ability to create secure currencies, encoding digital and real (physical) assets.

NFT technology and currencies are expected to play a prominent role in the blockchain and cryptocurrency industry and digitize a lot of things in a perfectly transparent and secure manner.