NFT basics

NFTs (Non-fungible tokens) continue their triumphant global march. They begin to take part in almost all spheres of life, not only art (music, graphic samples, even books and short stories can be wrapped into a token), fashion industry (brands and logo pieces) and web (including icons in social networks, memes, etc.) but also business and casual items (such as foodstuff or tissues). It's like the world itself is transforming into a large bright and diverse token. In fact, anybody with the necessary knowledge and tools, can create a personal NFT.

NFTs are digital assets, traded online, usually by means of cryptocurrency, and are generally created using the same software. Some are long-living, others remain valid only for a couple of months. Some of them cost a fortune, some don't. The first NFTs emerged in the Ethereum network and gained popularity very quickly.

Many factors affect the cost of an NFT. It can be limited supply, which raises the value, an object's popularity (such as Mike Winklemann drawings) or maybe the history of the token, which it gains after being kept by celebrity owners. One of the most attractive facts is that purchasing an NFT offers the buyer the ownership of the original item since NFTs contain built-in authentication providing not only proprietary, but also bragging rights.

Types of NFTs

NFTs can be separated into categories. The most known of them are:

• Collectibles. Emerged with the development of Cryptokitties, the first popular NFTs, which were created in the Ethereum network in 2017.
• Artwork. Another very popular type. There is a good deal of limited edition pieces of art circulating on the web. Any type of digital art piece can be wrapped into a token, however, the majority of them are pictures. Artists make use of oracles and smart contracts to create their unique collections.
• Event tickets. Can be compared to selling tickets online, while it is not exactly the same thing. Such NFTs are minted by event managers on specific blockchain platforms, where customers can take part in the auction and store NFT-tickets in their wallets to verify their identity and admission later.
• Music and media. Music and media files can be linked to NFTs, enabling individual ownership-based access. 
• Gaming and virtual items. Game-connected NFTs are also very popular. They offer the functionality of ownership records for in-game items, which helps in-game economy grow. NFTs also focus on introducing a wide array of benefits for players. The value of NFTs may change with time. NFT-wrapped in-game items could easily help in recovering money by selling it outside the game. The first types of games to use NFTs were, are 'pet-type' games (the first was CryptoKitties, where cute kittens were wrapped into the tokens. The cats were bred, mated. The result of the mating can be also sold out) and the 'arena type' (where creatures fought against one another, receiving rewards which could be later exchanged for another cryptocurrency. All the creatures were unique and their uniqueness and ownership was proved by an NFT-mark). Now NFTs can appear in almost any type of game (whether it is a strategy, PvP fight, PvE, casual game, etc.). The main difference with common games lies in special assets or cards, which can be traded or given to someone else in-game or at a special marketplace. Each asset is represented with a token. In a common game an asset or an object, even a unique one, bought in-game is tied to the character (or, at least, to the player's account) and can not be given or sold out, while an asset wrapped in a unique NFT can. The 'play-to-earn' technology and the use of NFTs give players opportunities  impossible in common games. 'Sandbox' type games offer virtual lands and real estate in the shape of NFTs, which can be bought, exchanged or sold out at a special marketplace (in addition there are specific 'admission NFTs', which can be received for performing seasonal tasks). 'Staking' is another type of earning in games with the help of NFTs (when an NFT is bought to earn cryptocurrency in-game. NFTs can be also sold out, but they are more valuable when they work to raise capital). As already mentioned above, there are games where NFT represents certain in-game objects which can be gained and sold out. 'Card games' (like Hearthstone and the like) can be also based on NFTs. Each card is unique and wrapped in a token, it can be bought, sold, exchanged or stored in a form of a collectible (such cards can also come with seasonal events).
• Real-world assets. Usually luxury goods or fashion goods or the goods of high value. NFTs help with the proof of ownership. 
• Identity. NFTs can be also used in the sphere of certification, patenting and licensing. Identity-based NFTs ensure that individuals can store evidence of their identity without the risk of losing it.
• Loyalty programs membership. The participants of a program receive NFTs which they may trade, receive discounts (for purchasing film tickets for the premier, for example, or discounts in cafes and e-shops, like Crypto Barristas), rewards (such as free meals in Royal Perks or a limited access to the new product or gifts once a year in Clinique) and other (such as virtual membership in a yacht club). Some brands are even going to collaborate with other brands by means of smart contracts to give participants access to a special community, exclusive goods and space for communication.  
• Memes.
• Domain names. Even domain names can become tokens, which helps to reduce complexity concerning long and complicated addresses. Specific services (Decentralized Domain Name Services) are used here.
• Charities and support. These programs involve NFT owners into various programs, aiming at support (for example, educational) or fund-rising (such as GainForest, which offers NFTs to the investors, who participate in the program of tropical rainforest keeping. These tokens' value equals that of actual parts of the forest, allowing participants to watch the territory and control the situation). 

Difference between NFT and cryptocurrency

NFTs can be sold and bought or stored like cryptocurrencies, yet, these items are not the same. One of the key differences is that cryptocurrency is a fungible item (can be traded and exchanged for one another and one coin has an equal value with another same coin. One Bitcoin is worth one Bitcoin). NFT is a different thing. Each token has a unique digital signature, so NFTs can not be exchanged between each other. They can be purchased by cryptocurrency (depending on which type of currency is accepted by the NFT seller).

What is it used for?

What are NFTs can be used for, being so unique and valuable?

• Monetizing wares. Artists, writers, musicians, content makers and the like do not have to rely on platforms, galleries and other tools and producers to sell their products. They can sell the ownership to the client directly, in the shape of a unique token. Artists can also program in royalties to receive sales interest if their creation is sold again.
• Fund raising. Selling unique NFTs helped to collect money for charity or other projects.
• Investment. Most collections are increasing in value, so it could be a good investment.
• Collecting memories. NFTs have their own unique history, which make them sometimes a good collection of memories, both personal and historical.

Conclusion

Masterpieces, luxury objects and pieces of art are part and parcel of human life, and the 'world of web' is not an exception. Whenever the person goes into the fast developing blockchain world, they come across the growing NFT sector. Due to their uniqueness and value these tokens gain more and more popularity and would spread their influence even further.