What are Non-Fungible Tokens (NFTs)?
Generally, for an asset or goods to be fungible, they must have the ability to be interchangeable with other individual goods or assets of the same type. Similar goods and assets that are NOT interchangeable are non -fungible.
Non-Fungible Tokens (NFTs): are unique, digital items with blockchain managed ownership.
NFTs are a type of cryptographic token that represent a unique asset. They are tokenised versions of real-world assets. They function as verifiable proof of authenticity and ownership within a blockchain network.
Examples of Popular NFTs:
- Artwork
- Trading cards
- Virtual game items
- Cryptokitties
Future of NFTs
Even though NFTs have been around for several years and sales of all types of NFTs have been growing steadily, it seems 2021 could be the year where the trading volume could increase exponentially. The value of NFTs not only comes from their scarcity as generally, the creators limit the tokens but also their uniqueness, as the creators have recorded this quality on the blockchain.
Ethereum
Ethereum: a decentralised open-source blockchain and is the second-largest cryptocurrency after bitcoin.
Most NFT sales are made on the Ethereum network and the vast majority of NFTs are built using Ethereum token standards, for example, ERC-721 and ERC-115. Don’t worry this sounds technical, but it is remarkably easy to buy, trade and even create your own NFTS.
Some great places to buy and trade NFTs, include:
Knightsbridge Incorporations and blockchain technology
At Knightsbridge Incorporations Ltd, we are at the forefront of blockchain technology and can help you when moving these NFT assets into a more fungible asset, like FIAT currency. Whether there is a taxable event in this process, we can let you know.
Useful links:
Have some fun too and create your own NFTs. Here are a few places that will guide you through the process:
We believe in Experiences. We use Our Experience to Improve Yours.