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Nonfungible Tokens: Trend or Fad

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Nonfungible Tokens, abbreviated as NFT, have become somewhat popular in the past few months. But they didn't get their start this year, they actually started in 2017, with the launch of the famous CryptoKitties.

Digital cats

Founded in 2017, CryptoKitties is an Ethereum based game that allows users to collect and breed digital or virtual cats. The games tokens are nonfungible, while each token represents a unique digital cat on the ETH blockchain. In late 2017 with the massive bull run that the Ethereum price and cryptocurrency space had, Crypto Kitties exploded and attracted mainstream press and adoption.

The high demand for CryptoKitties led to the number of daily transactions on the Ethereum network reaching an all-time high (1.34 million) in January 2018. Then, just as quickly as it became popular, once the crypto prices started dropping in 2018, so did the popularity of the digital kittens. Although very cute, some saw this as a fad.

That is until this year, as NFT's have started to gain popularity and a resurgence of the virtual cats have appeared again.

Virtual collectibles

NFT's are represented by tokens, but digital cats aren't the only use case. Besides cats, any sort of NFT or token can represent anything in the virtual world. It's true that NFT's have become largely popular with art aficionados.

For example, there's Rarible, which is an NFT marketplace founded in 2020 that allows users to mint, buy, and sell their rare digital collectibles. There is also Decentraland, which is a decentralized virtual world where users who adorn customized avatars can trade collectibles with each other.

Besides collectibles, this shows the possibilities of NFT's. If you can tokenize an avatar or digital art piece, you can also tokens other things such as virtual land or estates, or even domains.

Ethereum Name Services

This also brings us to ENS or Ethereum Name Services. You may have seen them on Twitter handles such as "Vitalik.ETH". Founded by the Ethereum Foundation in 2017, Ethereum Name Services is an open and distributed naming system based on the Ethereum blockchain. The protocol has more than 190,000 registered names and has integrated over 100 wallets and dapps to date.

Top level domains (TLDs) are what most people are familiar with, like .com, .org. or .net. However, these .ETH domain names are unique to Ethereum and are using the NFT protocol which is ERC-721.

Using Bitcoin with NFTs

Don't worry if you think that because you only use Bitcoin, you can't also use NFTs. Since you can now wrap your Bitcoin on Ethereum, the opportunities open up yet again, where you can peg your BTC to ETH and then start experimenting with nonfungible tokens.

Suffice to say, since NFT's have been around for three years now and are only gaining more steam, it's become more than a fad, and may now become a trend to bigger and better things as our lives become more and more digitized.


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Comments

Some of the ETH based NTF prices can be attributed to gas fees is my personal opinion

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