If you are into crypto, then chances are that you have heard the word “NFTs” being thrown around quite a lot. You might be wondering: What exactly is an NFT?
An NFK (non-fungible token) is a digital asset that can’t be divided and has unique properties. It is based on the ERC-721 protocol, which makes it specific to each user (avoiding the risk of possible fraud). It can be compared to cryptocurrencies like Bitcoin , but at the same time it’s something completely different.
NFTs are great because they allow companies and developers to create decentralised applications with unique digital assets.
But before we start throwing around words like decentralised applications and unique digital assets, let’s get a better understanding of why non-fungible tokens are important for companies and developers.
Up until recently, most digital transactions were made through the use of fungible tokens. Let me explain: Let’s say that you and 10 other people decide to buy a car. You might buy your own for instance, and the rest share another one (or more). This happens because those cars serve the same purpose: transportation. But now imagine that you want to buy a house or an apartment with 5 rooms as a family (or something similar). In this case, you wouldn’t want to share the same house or apartment with 10 other people, because you would need them all to yourselves. You might even need more than 5 rooms…. This is where NFTs come into play!
Because each NFT is unique, they can be used for completely different purposes. Here are some of the most popular ones:
– Collectibles (owning something unique!)
– Gaming (tokens for games like War of Crypto, where you can buy armour and weapons specific to your hero)
– Trading cards (because they are based on tokens, the trading process is extremely fast)
– Payment solution (pay with your tokens, which are unique and you always have them with you).
– Much more!
A really interesting example of NFTs is the Cryptokitties , where players can buy, sell, breed and even create new kitties. Your cryptokitty will be completely yours (and nobody else’s) which allows you to make a profit with it.
The benefits of NFTs are limitless, and they allow developers and companies to create decentralised applications that serve new purposes and help customers solve problems.
How to create engaging community online?
Now that we know why NFTs are great, it’s time to learn how they can help create engaging communities online.
It starts with a company or developer creating an amazing NFT. Let’s say for example that you own a retail store and you want your customers to be engaged in some way. You might give them a NFT as a first customer prize, which allows them to collect stamps from visiting your store. As a part of this first prize, you can also offer them the chance to win something bigger if they manage to collect all the stamps from your store. This way you will create an engaged community of loyal customers who visit your store more often and tell their friends about your rewarding system.
Another example would be a company that is opening a new branch of its business. Instead of giving away free T-shirts to its first 50 customers, it might want to create 50 unique NFTs to offer as prizes for the loyal ones. The best thing about this is that you can choose to sell the NFT instead of giving it away, which means that whoever gets the first prize might earn some money.
The possibilities are endless when you own your own NFTs 🙂