What are NFT or Non-Fungible Tokens? and what is the difference between Cryptocurrencies and NFT?

Non-fungible tokens or NFTs are cryptographic assets in a blockchain with different codes and metadata that distinguish one NFT from the other. That is the main difference between cryptocurrencies and NFT, cryptocurrencies was identical to each other, so they can serve as a medium for commercial transactions. While NFT cannot be traded or exchanged at equivalency.

Let us relate it to our physical money to make the explanation simple. Our physical and cryptocurrency money is an example of fungible things, meaning they can be traded or exchanged with one another. For example, one bitcoin is equivalent to one bitcoin which we can trade and exchange or one dollar is equivalent to one dollar. And we can trade this bitcoin or one dollar for other units, For example, 1 USD = 53.01 PHP, and 1 bitcoin = 17.04 Ethereum or vice versa.

NFT change the paradigm by making each token different and irreplaceable, making it impossible for one NFT to be equivalent to another NFT. In addition, NFTs are extensible meaning one NFT can be bred to another NFT to make the third NFT which is still different and irreplaceable. NFT have ownership detail for identification and transfer between the owners.

NFT History

2012-2016

In 2012, Meni Rosenfield released a paper that introduce a new coin in the bitcoin blockchain, it is called the "Colored Coins". Colored coins are sometimes called metacoins, this began as an improvised creation of miners. This is the driving force of NFT long before Ethereum. Ethereum was made in 2015 and blow up in January of 2018.

On May 3, 2014, an artist named Kevin McCoy minted the first-known NFT, it is called the quantum in the Namecoin blockchain. Quantum is sold for $1.47m in June 2021. This event makes a significant amount of experimentation and development, in this time Ethereum make its initial reign over the NFTs.

2017-2020

Token standards enter and support the shift of NFT to Ethereum, this allows the creation of tokens. John Watkinson and Matt Hall follow the success by creating their company called Rare Pepes, they make a series of NFT in the Ethereum blockchain called the Cryptopunks.

At this same time earning games like Cryptokitties, a virtual game based on the Ethereum blockchain, this game enables the player to adopt, breed, and trade virtual cats and stored them in a virtual pocket. This is followed by other games like Axie Infinity (AXS).

2021

They said it is the year of the NFT, in this year there is a large surge in NFT supply and demands. This is influenced by many things like the creation of other famous NFTs like the Board Ape yacht Club, the emergence of the different marketplace for NFTs like Open sea, sadmilk, and supperrare, and other gig blockchains start getting involved with their own version of NFTs like Solano and Cardano. In addition, at the end of the year, Facebook rebranded as Meta and moved into the metaverse.

References

https://www.investopedia.com/non-fungible-tokens-nft-5115211

https://www.zenofineart.com/blogs/news/the-beginning-of-nfts-a-brief-history-of-nft-art

All of the images are from https://unsplash.com/