Non-Fungible Tokens — Why are Some Worth Millions?

What is NFTs?

NFT stands for non-fungible token, non-fungible means that something cannot be exchanged for another item because it’s unique. For example, one piece of artwork, let’s say the Mona Lisa, is non-fungible — meaning only one real, unique version exists, even if you find another piece of art created by the Leonardo da Vinci on the same time.

Fungible items, on the other hand, can be exchanged for one another. For example, a one-dollar is always fungible with all other one-dollar coin or bill even if they were minted in different mints or different years.

Technically, NFTs are also smart contracts that live on a blockchain and represent ownership of unique items, the contract stores the unique properties of the item and keeps track of current and previous owners.

Taking MysterySwap.io as an example, a NFT can even be programmed to not only allow the current owner of a Mystery Box to be paid with USDT when it’s being sold, but also allow the owner to mine MBC tokens if he/she agrees other collectors’ request to swap their Mystery Boxes.

Why is NFTs useful?

In the digital world, it’s proved to be very hard to track who owns a digital file, simply because the file can be copied and distributed effortlessly. How can you prove who is the original owner when everyone has an identical copy of the file then? NFTs is the solution.

Imagine that you made a piece of art on your computer, let’s say a beautiful JPG image, you can then create or mint an NFT out of this.

The NFT is also a simple smart contract that represents your art contains a bit of information about it, especially a unique fingerprint of the JPG image rather than the artwork itself. This smart contract is then stored onto a blockchain, and you, the creator, become the owner.

Now you can sell that NFT and the blockchain makes sure the bit of information representing your art can never be tampered with, it also allows you, and everyone else to track who’s the current owner of the NFT and for how much you bought it.

Now come to the interesting part!

When you buy an NFT that represents artwork, you don’t get a physical copy of it, and most of the time, everyone can download a copy for free!

That is because NFT only represents ownership, which is recorded in a blockchain so nobody can tamper with it, someone says that NFTs give you the digital “bragging” rights.

While the owner of the NFT owns the original artwork, the creator of the NFT retains the copyright and the reproduction rights, so an artist can sell not only his original artwork as an NFT, but also can sell the prints.

Other than digital art, NFT’s can also be used to sell tickets, domain names, in-game items, or physical items like properties, basically anything that is unique and needs proof of ownership.

For example, Twitter CEO Jack Dorsey sold his first tweet as an NFT. Anyone can see that tweet on his profile, but now, only one person can own it, and that person paid over 2.9 million dollars on March 22, 2021 for it.

I could even make an NFT out of this blog post, you could then buy it and be the owner of this blog post, even though it’s free to read for everyone.

Why some NFTs worth millions?

Like other products in the world, the price of NFTs is determined by what people are willing to pay for it. For example, if I’m willing to pay a hundred dollars for a particular NFT, then it’s worth a hundred dollars. Prices are driven by supply and demand, so be careful because an expensive NFT becomes worthless if nobody wants to buy it and keep an extra eye on rare NFTs.

In MysterySwap.io, each character contained in a Mystery Box has a scarcity level which indicates how rare it is, the higher the scarcity level is, the rarer it is. A character with a scarcity level of CASH means the probability of occurrence of such character is one out of one hundred!

Until opened, no one knows exactly what character is inside the Mystery Box and what scarcity level it is, if you got a rare character, you’re lucky!

So there you have it!

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