NFT

NFTs (non-fungible tokens) are all the rage these days; but understanding exactly what an NFT is can be challenging.  This article, 7 Things You Should Know about NFTs, is a good place to start learning about NFTs.

Understanding NFTs is easier when you understand the characteristics of an NFT.  The following are the characteristics of an NFT:

  • Non-interoperable: NFTs are unique and unlike fungible tokens which are all the same basically and any one is just as good as any other; NFTs are not interchangeable.
  • Indivisible: NFTs cannot be divided into smaller denominations. 
  • Indestructible: NFTs are stored on the blockchain and can never be destroyed. 
  • Verifiable: Because NFTs exist on a blockchain they can be traced back to the original creator.

This video, Could Enjin SUPERCHARGE Gaming NFTs?! (at minute 6:50) points out three aspects of determining value of an asset: 

  • Rarity: How scarce is it?
  • Provenance: Where did it come from?
  • Quality/Utility: How good is the asset or how good does the asset serve your specific needs?

Machine-readable metadata can be turned into an NFT.  What is an example of machine-readable metadata?  Have a look at the rules related to these reference financial reporting frameworks.  All those rules could be turned into NFTs. Seems to me that a DataBook could be an NFT; NFTs can be stored in a digital distributed ledger.


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